Offshore Africa Magazine Vol. 10 Issue 6 - August, 2020 Edition by B-ThriveSolutions

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VOL. 10

ISSUE 6 - AUGUST 2020

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Ghana To Reclaim “Non-Performing” Oil Assets 2nd Bid Round Suspended Indefinitely Nigeria Imposes 30% Cost Reduction in Oil Contracts Producers in Africa Struggle with OPEC Quotas Huawei Targets Angolan and Nigerian Oil Industries

• An HSSE Advisor at Springfield E&P. Credit: Springfield E&P

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Contents 8 EXPLORATION & PRODUCTION Nigeria Imposes 30% Cost Reduction in Oil Contracts Nigeria is implementing a cost curtailment drive to make its oil and gas sector more competitive in the current global low oil price market. The government says it is reviewing oil and gas contracts to achieve a minimum 30 percent cost reduction as part of measures drive down costs and arrive at a targeted average production cost of $10 per barrel by the end of 2021.

14 GAS French Firms Dominate Mozambique’s LNG Total’s arrival in Mozambique in September 2019, which marked a high point in France’s efforts to establish its presence in the southern African country, was only the cherry on the cake of a wider-ranging campaign in which French banks and companies were already heavily involved.

Ntomme-9 Well Producing at TEN Fields

Why CNOOC Passed up Preemption Option on Tullow Oil in Uganda The Chinese major CNOOC has serious doubts as to the viability of Ugandan crude exports, which explains its recent lack of investment and its decision to leave the way clear for Total.

After having failed to respect its OPEC quotas in May and June, Gabon is now trying to increase the pressure on producers to stick to the organisation’s rules.

26 DOWNSTREAM Africa Grapples with Petrol Tensions

19 COMPANY NEWS Huawei targets Angolan and Nigerian oil industries Having made Africa’s oil industry one of its target markets, the Chinese telecoms giant Huawei already has a solid foothold in Algeria and Nigeria. Angola is next in its sights.

11 SPOTLIGHT

Crude Reality: Africa Producers Struggle with OPEC Quotas

Petrol prices are back to preCovid levels, in some cases are even more expensive, as motorists and commuters groan under the weight of rising prices. The picture is grimmer in Africa where most countries import refined fuel despite the continent being a key oil producer.

9 EXPLORATION & PRODUCTION

Completion operations are underway at the Ntomme-9 production well at the TEN fields, offshore Ghana, ahead of it coming onstream in August, sustaining oil production beyond current 50,900 bopd levels, according to latest operational update issued by field operator Tullow Oil.

22 GULF OF GUINEA

28 TECHNOLOGY Cloud, Artificial Intelligence (AI), and 5G Reshaping the Oil and Gas Industry Undoubtedly, the oil and gas industry has entered an extremely difficult period and is witnessing changes, the likes of which have not been seen for over a century.

32 OIL & GAS PEOPLE Total’s Adewale Fayemi Spearheads Oil Industry Lobbying in South Africa Since taking over at the helm of the South African subsidiary of the French major Total in August 2018, the Nigerian Adewale Fayemi has become the leading private sector player in South Africa’s oil industry.

39 COUNTRY FOCUS Intrigues as Oil -rich Equatorial Guinea’s First Lady Accelerates Succession Plan As the strength of family patriarch Teodoro Obiang Nguema wanes, his wife Constancia is setting up the political mechanisms which will enable their son Teodorin to take his place as president.

40 SPOTLIGHT Ghana To Revoke Licenses of “Non-Performing” Oil Blocks Ghana’s Minister of Energy, Hon. John Peter Amewu, is expected to announce the cancellation of licenses granted to some firms to explore for oil and gas offshore Ghana. The licensees have failed to deliver the minimum work obligations as stated in their petroleum agreements.

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EDITORIAL

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PUBLISHER/EDITOR-IN-CHIEF GILBERT DA COSTA Publisher@offshoreafricamagazine.com Editor-in-Chief@offshoreafricamagazine.com EDITOR KATE DA COSTA Editor@offshoreafricamagazine.com REPORTERS Patience Aremu Editorial@offshoreafricamagazine.com MARKETING EXECUTIVE ELIZABETH AMOAH adverts@offshoreafricamagazine.com CIRCULATION/ SUBSCRIPTION KWAME ABOAGYE Email: subscriptions@offshoreafricamagazine. com LEGAL CONSULTANT GODWIN DJOKOTO TAKORADI REPRESENTATIVE FELIX BENTUM Takoradi@offshoreafricamagazine.com EUROPEAN UNION BUREAU KWAME AGYEI-NYARKO Fatcoin Group Kneppelweg 5 NL-1104 MA Amsterdam Phone: +31 6 271 60131 Email: kanyarko@yahoo.com Email: Amsterdam@offshoreafricamagazine.com LONDON BUREAU AL-HAJI ABDUL TANKO Aimex Focus Ltd 125 Roman Road, Bethnal Green London E2 OQN,UK Phone: +44 794 979 3126 Email: London@offshoreafricamagazine.com

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ABUJA BUREAU Princess Umoh 3rd Floor, Block A, City Plaza, Plot 596, Ahmadu Bello Way Area 11, Garki Abuja@offshoreafricamagazine.com LUSAKA BUREAU HRH PRINCESS KUNDA GianVirtue Ltd 395 Simon Mwansa Kapwepwe Road Avondale- ZAMBIA Email: hrhkunda@gmail.com Email: Lusaka@offshoreafricamagazine.com All correspondence to: The Editor, Offshore Africa GP 4923, Accra-Ghana Email: offshoreafricamagazine@gmail.com Phone: +233 (0) 54 739 5411 Phone: +233 (0) 50 575 2150 Phone: +233 (0) 57 241 9435 Twitter: @OffshoreAfrica_ Facebook: OffshoreAfricaMagazine Offshore Africa Magazine is published by Jubert Communications Limited LOCATION 7, Dadekotopong Street, East Legon, Accra

editorial Reclaiming Ghana’s Dormant Oil Licenses

For years, some companies granted exploration licenses for offshore blocks in Ghana have failed to deliver on the minimum work commitment stipulated in their petroleum agreements. These agreements have regulations and penalties for violations. Almost all the dormant blocks are in the derisked offshore Tano Basin. Initial studies suggest these are very promising acreage that deserves to be processed for exploitation. This is particularly imperative given the fact that the Jubilee field is already declining in output. It is a mystery why managers of Ghana’s hydrocarbons have failed to act to protect the country’s interest in this business. Offshore Africa supports current efforts to revoke and reclaim dormant blocks. The oil industry is still a learning curve for Ghana, industry operators and managers. Nevertheless, there is a need to have a pragmatic and consistent approach in building a forwardlooking petroleum industry.

GILBERT DA COSTA Editor-in-Chief, Offshore Africa magazine Gilbert Da Costa is a journalist who worked for many years as the Nigeria correspondent for Cable News Network (CNN), British Broadcasting Corporation (BBC), Voice of America (VOA), TIME magazine and Associated Press. Born in Accra, Da Costa provided some of the most exciting, factual and unbiased reporting of top stories during his time in Nigeria- the long period of military dictatorships and the return to civil democracy in 1999. A lawyer, Da Costa has had many outstanding experiences in his 30 -year career, including a minute-by-minute live reporting for CNN on the sudden death of both military ruler General Sani Abacha and politician Moshood Abiola in 1998. He was credited with CNN’s electrifying coverage of Nigeria between 1993 and 2001. Working in Nigeria offered him the opportunity to cover the oil and gas industry in great detail. He also covered the Boko Haram phenomenon extensively and was the first foreign reporter to visit Maiduguri and Limankara, in the troubled northeast, on assignment for TIME magazine in 2005. Da Costa has interviewed several leading international personalities, including four serving Nigerian presidents.

INTERNATIONAL ADVISORY BOARD CHARLES DARKU: Ex Tullow Ghana Managing Director NJ AYUK: Founder & CEO, Centurion Law Group RANTI OMOLE: Executive Chairman, Radial Circle MC VASNANI: CEO/MD, Conship NIALL KRAMER: CEO, South Africa Oil & Gas Alliance (SAOGA) PROFESSOR JOHN SUTTON: London School of Economics

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VOL.

EXPLORATION & PRODUCTION

Nigeria Imposes 30% Cost Reduction in Oil Contracts Cost curtailments Nigeria is implementing a cost curtailment drive to make its oil and gas sector more competitive in the current global low oil price market. The government says it is reviewing oil and gas contracts to achieve a minimum 30 percent cost reduction as part of measures drive down costs and arrive at targeted average production cost of $10 per barrel by the end of 2021. A minimum 30 percent reduction “We are implementing industrywide cost curtailment measures with aggressive capital allocation to priority projects with low cost of production,” said Timipre Sylvia, Nigeria’s Minister of State (Petroleum), at an event

• Egina FPSO is one of Nigeria’s largest oil investment

hosted in Lagos at the end of July to mark the 10th anniversary of Seplat, a foremost Nigerian oil and gas firm. “We want to achieve cost discipline, including downward negotiation of all contracts and other business obligations. We will negotiate all contracts to achieve a minimum 30 percent reduction.” Production costs Nigeria, Africa’s biggest oil producer, is grappling with a high cost of production in an increasingly low -cost, low price space. Exploration has come to an almost complete standstill in Nigeria with only Shell continuing its activities with the Borr jack-up Frigg. This contract is expected to end in December. “Today, we have one of the

highest production costs in the world. You will be surprised that some assets are producing oil at as high as $60 per barrel, or even beyond that,” noted Mele Kyari, Group Managing Director at State-owned Nigeria National Petroleum Corporation (NNPC). “But there are also assets that produce oil for as low as $9 per barrel. So, we have this wide

range of production costs in our environment, clearly linked to inefficiencies. The overall result is that we are producing oil at an average of about $34 per barrel. This is not acceptable.” Nigeria also expects to diversify its oil-based economy and implement current quotas imposed by OPEC+.

Etame FPSO books Extension Offshore Gabon

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AALCO Energy has awarded BW Offshore a one-year contract extension for the lease and operation of the FPSO Petróleo Nautipa at the Etame field offshore Gabon.

• The FPSO Petróleo Nautipa.

The firm period has been extended from 3Q 2021 to 3Q 2022.

The spread-moored FPSO Petróleo Nautipa has an oil production capacity of 25,000 b/d, gas compression capacity of 3 MMscf/d, and storage capacity of 1,080,000 bbl.

Rystad: FPSO Contract Awards to

• Sangomar FPSO render - Credit: Woodside

Rebound in 2021 after Poor 2020 Norway-based energy intelligence firm Rystad Energy said in July it didn’t expect any new FPSO orders this year, however, it expects the situation will improve next year when it foresees seven new FPSO to be ordered.

(bpd) of oil and 130 million cubic feet per day (cfd) of gas. Rystad Energy estimates that the total greenfield capex for Sangomar phase 1 will be around $4.2 billion.

Rystad said that Modec won the only contract so far awarded in 2020, to deliver a new-built FPSO for Woodside’s Sangomar development in Senegal.

“For the remainder of 2020, we don’t expect to see any new FPSO contracts being awarded. Over the last 10 years, only 2016 saw a lower level of activity when not a single FPSO contract was awarded. However, from 2016 activity quickly rebounded with 27 awards in the three-year period from 2017 to 2019.”While Rystad doesn’t expect any new

The vessel, which will be the first FPSO to operate in Senegal, will be supplied on a turnkey basis and feature topsides capable of handling 100,000 barrels per day

No new orders in 2020

awards this year, Reuters on Wednesday said that Petrobras was preparing to launch a tender to build Brazil’s largest-ever FPSO able to process 225,000 barrels per day, and targeted for deployment at the Buzios field.

Per Reuters, Petrobras plans to launch the leasing tender for the FPSO by the end of August, and the competition for the FPSO is expected to take several months

EXPLORATION & PRODUCTION

Ntomme-9 Well Producing at TEN Fields

Tullow Oil says it has identified new opportunities at Jubilee and TEN fields, and additional work is ongoing to convert them into reserves. For example, the Ntomme field has seen increased resources with 40-million-barrel Ntomme for west field. Tullow Oil expects to sustain current strong production for its short- and medium-term revenue goals. “In the second half of 2020 our focus will remain on continuing to deliver safe and reliable production from West Africa, reducing debt and building a cost effective organization that can compete in a low oil price environment,” declared new Chief Executive Officer Rahul Dhir. In the first half of 2020, gross Jubilee production averaged 84,700 bopd; gross TEN production averaged 50,900 bopd. “Ghana’s operational performance has been strong in the first half of 2020 with uptime on both FPSOs in excess of 95 percent,” Tullow said.

to maintain current production of around 90,000 bopd. “We pretty much peaked in terms of production and the work we are doing now is to try and keep that profile as flat as possible. But there is an eventual decline and we are seeing is at we speak,” noted Kweku Awotwi, former head of Tullow Ghana. To sustain optimum level of production at the Jubilee field, Tullow says it has increased the gas handling capacity of FPSO Kwame Nkrumah to 175 MM standard cubic feet (scf/d). “We needed to increase the gas handling capacity on the Jubilee FPSO to around 175 MM scf/d of gas. This was successfully completed in February,” announced Tullow’s Chief Operating Officer Mark MacFarlane. However, Ghana is able to utilize a maximum gas import of 125 MM scf/d, leaving an unutilized portion of around 50 MM scf/d, for which Tullow says it has received the approval of Ghana’s Ministry of Energy to flare.

Europa Identifies Multiple Prospects in Offshore Morocco Acreage Europa Oil and Gas is working on potential drilling targets in its Inezgane permit offshore Morocco. Technical studies have continued despite COVID-19-related restrictions, the company said in a corporate update, with the focus on reprocessing and interpreting 3D seismic data to de-risk large prospects in the Lower Cretaceous.

have been mapped which could in aggregate hold close to 10 Bboe, and each prospect has mean resources of more than 150 MMboe. Some have stacked reservoir potential with a wide range of structural styles, including a four-way dip closure in the case of the 827-MMboe Falcon and 204-MMboe Turtle prospects. Europa plans to further de-risk the prospects and leads and depending on the results, seek partner(s) to drill wells.

ReconAfrica Subsurface Evaluation to Aid Kavango Basin Exploration

Total to Spud Luiperd-1 Offshore South Africa

The block, in Outeniqua basin 175 km off the southern coast of South Africa, covers 19,000 sq km in 200-1,800 m of water. Luiperd is the largest prospect in the Paddavissie fairway, at the southwest corner of the block,

OML 109 comprises 14 identified and mapped prospects and leads, with estimated potential resources of more than 500 MMboe in a shallow-water, low-cost operating environment, close to existing oil and gas infrastructure such as the onshore Escravos Terminal.

The company brought the field onstream in September 1998.

The Inezgane license area covers 11,228 sq km (4,335 sq mi). To date 14 prospects and 16 leads

Oil production at the Jubilee field, Tullow’s most prolific asset, is gradually declining as production is being boosted by massive water injections, and associated gas flares and offtakes

Total SA and partners will begin a multi-well drilling program on Block 11B/12B in September with spud of Luiperd-1. The Odfjell Deepsea Stavanger semisubmersible rig has departed Bergin, Norway, for South Africa to perform the drilling, partner Africa Energy Corp. said July 2.

tlas Petroleum International has restarted workover and well intervention activity on the OML 109 lease offshore Nigeria to enhance production from the marginal Ejulebe field.

and has been de-risked by the nearby Brulpadda discovery and subsequent 3D seismic work. The basin-opening Brulpadda oil and gas discovery on the block was drilled by Deepsea Stavanger in February 2019. Total E&P South Africa BV is operator (45%) with partners Qatar Petroleum International Upstream LLC (25%), CNR International (South Africa) Ltd. (20%), and Main Street 1549 Proprietary Ltd. (10%, of which Africa Energy has a 49% stake).

econnaissance Energy Africa Ltd. (ReconAfrica) completed a subsurface evaluation delineating large prospective conventional hydrocarbon bearing structures throughout the entire Kavango basin. The study will aid a 3-well exploration program scheduled for fourth-quarter 2020 to test organic rich shales and more shallow conventional structures to confirm a thick, active, petroleum system throughout the sedimentary basin, the company said in a press statement in July. A new extended high-density Aero-Mag survey and other new ancillary data coupled with Halliburton’s LithoTect

structural interpretation tool have generated a thorough understanding of how deep Permian rift basin developed, the company said. Specifically, a faulting system has been identified throughout the basin which is responsible for potential conventional fault and stratigraphic hydrocarbon bearing structures. This work builds on the unconventional potential previously identified. The deep Kavango basin extends from northeast Namibia to northwest Botswana. Namibian petroleum license PEL 73 covers an area of 25,341.33 sq km (6.3 million acres) and Botswana petroleum license PEL 001/2020 comprises 9,921 sq km (2.45 million acres), contiguous to the Namibian license.

OFFSHORE VOL.10.6

Well Overhauls Resume at Ejulebe field offshore Nigeria

SPOTLIGHT

Ouattara Administration looks to Perenco to Improve its Record in the Oil Sector

Franco-British oil company Perenco, which is the leading oil producer in Gabon and Cameroon, is considering extending its presence into West Africa. According to our information, the company filed a request in June for access to seismic data regarding the composition of Ivory Coast’s subsurface.

Perenco, which currently has no assets in the West African country, is being given close attention by the government of President Alassane Ouattarra. The authorities, who are in an increasingly nervous state as the 31 October presidential elections approach, are pulling out all the stops to attract oil companies into the country, which has little

to show for its activities in the oil sector during Ouattara’s latest term. No new commercially viable field has been discovered in Ivory Coast during the last five years. Ivory Coast has not yet signed an agreement with Vitol, moreover, regarding the price of the gas from block CI-202 off Grand-

Bassam to serve as feedstock for Abidjan’s thermal power stations. The only positive news is that Qatar Petroleum (QP) took stakes in mid-May in the shallow water CI-705 and CI-706 blocks operated by Total. Perenco declined to respond to questions regarding its intentions.

OFFSHORE VOL.10.6

East Africa’s Oil Industry is Viable and Exciting

With projected production cost said to average $50 per barrel, Uganda’s oil resource has been described as “very competitive even in a depressed low oil prices environment.” Representatives from Stanbic Bank, Shell, Baker Hughes and Kenya National Oil Company made the submission in a recent webinar spotlighting oil and gas prospects in East Africa.

Oil Pipeline, marks the beginning of a new chapter for East Africa’s energy industry.

The cost per barrel of the integrated Lake Albert Development Project is estimated at around $50. This is explained in part because the country’s hydrocarbons are within shallow deposits which are less drilling intensive and do not need as much casing, tubing and completion work, they observed.

The Lake Albert project, also called the Tilenga Project, has a production capacity of up to 230,000 bopd, which would propel Uganda in the top 5 of sub-Saharan Africa’s oil producers. In addition, the proposed 60,000 bopd refinery and some of the overarching issues were mentioned. Good or bad deal? Under the terms of the buyout deal, Total will acquire all of Tullow’s existing 33.3334% stake in each of the Lake Albert project licenses EA1, EA1A, EA2 and EA3A and the proposed East African Crude Oil Pipeline (EACOP) System.

French oil major Total has acquired Tullow Oil’s entire interests in the Lake Albert Development Project in Uganda, including the East African Crude

The deal is a win-win for all stakeholders involved. First, for Total, who ends up acquiring Tullow Oil’s entire interests in the Lake Albert development

project for less than $2/barrel. Then, for Tullow Oil, whose debt is rising and who is looking at raising $1bn by selling some of its key assets. After years of deliberations and debate, the closing of the sale allows the country and oil companies to move the conversation towards FID and practical project’s development. It also sends strong signals to the rest of the region, and Kenya in particular, to do everything possible to unlock their own oil & gas potential. Pipeline matters The moving forward of the Lake Albert Development Project, and its export pipeline, is a major step forward de-risking other potential oil & gas projects in East Africa and making them attractive for investments and financing. Given the current industry dynamics and potential liquidity constraints, participants agreed that a scenario under

which two regional pipelines would be laid was becoming more challenging. The size of Uganda and Kenya’s discovered reserves along with the capital and financial muscles of their operators will be factors weighing in which pipeline gets executed. The way the execution of the pipeline evolves will determine a lot of East Africa’s oil industry future. While the original northern route through Kenya was deemed less favourable, a scenario under which Total would consider buying out Tullow Oil’s assets in Kenya, where several significant oil discoveries were made, could potentially re-roll the dice in the region. Regional content, now Finally, and more importantly, the expected first oil from Uganda in the coming years should urgently lead to local content preparations not on a national, but a regional level.

SPOTLIGHT

Why CNOOC Passed up Pre-emption Option on Tullow Oil in Uganda The Chinese major CNOOC has serious doubts as to the viability of Ugandan crude exports, which explains its recent lack of investment and its decision to leave the way clear for Total. The boss of CNOOC’s subsidiary in Uganda, Zhao Shunqiang, has been sending out negative signals in recent weeks concerning the viability of developing oil operations on the shores of Lake Albert in the west of the country. According to our sources, back in March before the Covid-19 crisis had reached its peak, he informed the authorities in Kampala of his reservations over the feasibility of the project to construct a pipeline to Tanzania to export crude oil. Of particular concern to him was whether outlay on the pipeline could be recouped, and also the absence of sufficient guarantees that tax arrangements would remain consistent over the duration of the project. Museveni sides with Total In response to the concerns raised by the Chinese major, President Yoweri Museveni asked his most trusted advisor, the former secretary-general at the energy ministry Fred Kabagambe Kaliisa, to work on alleviating these sticking points. Meanwhile,

• The integrated Lake Albert Development Project

Total’s chief executive Patrick Pouyanné, who developed a close working relationship with Museveni in the course of a series of private discussions held without advisors in 2019, was also trying to address some of the same points raised by Shunqiang. However, the increasingly close relationship between Total and Museveni also became a cause of concern for CNOOC. Pouyanné’s research persuaded him to acquire Tullow Oil’s 33% share in

Uganda’s hydrocarbon deposits for $575m in April, whereupon Total became the leading investor in the project with 66% compared to CNOOC’s 33% stake (Africa Intelligence, 28/04/20). To general surprise, CNOOC chose not to exercise its right of pre-emption to acquire 50% of the shares held by Tullow Oil. The Chinese company realised that the leadership of the project to develop Uganda’s oil resources

was gradually slipping from its grasp and that it would not be able to compete, not least because it was Total which negotiated with two successive Tanzanian presidents, Jakaya Kikwete and John Magufuli, and persuaded them to allow the pipeline for exporting Ugandan crude to be routed through their country. Museveni had originally preferred the option of constructing it across Kenyan soil.

Eni Rejects Jail Term Requests over Nigeria Bribery Case

Eni says Italian Public Prosecutor’s requests for conviction of the Company, its former and current CEOs and the managers involved in the Opl245 proceeding are completely groundless. “During its indictment, in the absence of any evidence or tangible reference to the contents of the trial investigation, the Public Prosecutor has told a story based on suggestions and deductions as already developed during the investigation. This narrative ignores both the witnesses and the files presented within the two years long

and more than 40 hearings proceeding, that have decisively denied the prosecutorial hypothesis,” it said in a statement. Eni declared that its lawyers are going to show to the Court that both the company and its management’s conducts were correct in the Opl245 transaction. The statement said Eni and Shell paid a reasonable price for the license directly to the Nigerian Government, as contractually agreed and through transparent and linear means. “Furthermore, Eni neither knew nor should have been aware of

Eni recalled the decision of the Department of Justice and the US SEC, which decided to close its own investigations without taking any action against the company. Italian prosecutors have asked for oil majors Eni and Shell to be fined and some of their present and former executives, including Eni CEO Claudio Descalzi, to be jailed in a long-running trial over alleged corruption in Nigeria. In one of the oil industry’s biggest alleged scandals, Italian prosecutors allege Eni and Shell acquired a Nigerian oilfield in 2011, knowing most of the $1.3 billion purchase price would go to politicians and middlemen in bribes. In a Milan court, prosecutors

asked for eight years in prison for Descalzi and seven years and four months for Shell’s former head of upstream Malcolm Brinded. The prosecutors also asked for Eni and Shell to be fined 900,000 euros ($1.04 million) each and sought to confiscate a total of $1.092 billion from all the defendants in the case, the equivalent of the bribes alleged to have been paid. “There is no place for bribery or corruption in our company,” Shell’s statement said. Shell has said the 2011 agreement was a settlement of long-standing litigation, following the previous allocation of the block by the Nigerian government to Shell and Malabu, a company owned by former Nigerian oil minister Dan Etete. Another 11 people are involved in the case, including former Eni Chief Executive Paolo Scaroni, for whom prosecutors also sought an eight-year sentence. There has been no timetable for final decision in the case but the next hearings are due in September.

OFFSHORE VOL.10.6

the possible destination of the money subsequently paid by the Nigerian government to Malabu. Moreover, the payment was made after an inquiry carried on by the UK’s Serious Organised Crime Agency (SOCA). So there can therefore be no bribes from Eni in Nigeria, no existence of an Eni scandal.”

• Eni CEO Claudio Descalzi appeared before the panel

LOCAL CONTENT

Eni Ghana and its partners in the OCTP project donate medical equipment to support the fight against COVID-19 in Ghana

Total and Cnooc Ignore Uganda’s Local Content Rules Uganda may have introduced rules to encourage the hiring of Ugandan employees and use of local subcontractors, the fact that these are very little controlled means in practice the majors are much freer to hire whoever they please.

• Eni Ghana’s MD Roberto Daniele presented the items to Ghana Health Service

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ni Ghana and its partners to the OCTP Project, Vitol and GNPC, delivered today 15,000 swab test kits and 7 ventilators with related equipment to the Ghana Health Service, as a contribution towards Ghana’s effort to prevent, control and manage the spread of the novel Coronavirus in the country. This donation is part of the initiatives Eni Ghana and its OCTP partners are deploying to support Ghana in the fight against Covid-19, for an overall investment amounting to USD 850k. Other institutions to benefit from this initiative include Korle Bu Teaching Hospital, St Martins de Porres Hospital in Ekwe and the

Ellembelle District Health Directorate. This initiative was designed in collaboration with the Ministry of Health and will provide immediate relief and long-term support to the Ghana Health Care delivery system. Eni Ghana’s Managing Director Roberto Daniele commented that “Eni and its partners are determined to play an active and lasting role in Ghana’s response to the pandemic by strengthening the country’s health system, to the benefit of the whole population”. Eni is a globally integrated energy company operating in over 60 countries. It has been present in Ghana since 2009 and currently accounts a gross production of about 70,000 barrels of oil equivalent per day.

While Total and Cnooc have never been so close to signing the final investment decision (FID) for the development of the Lake Albert deposits after many setbacks, there is still a flagrant lack of control of local content rules. In his latest report published a few weeks ago, Auditor General John Muwanga called for a proper means of monitoring international oil companies and their use of local subcontractors to be established as soon as possible. This task would fall under the responsibility of the Petroleum Authority of Uganda (PAU), headed by Ernest Rubondo. Existing laws require proof, every time an expatriate employee applies for a work permit, that there is no qualified Ugandan available for the position. At least 30% of management teams must be made up of Ugandans. This figure increase to 40% for technical staff and 95% for other positions. It’s an ambitious goal that has had little impact on the ground. Moreover, the definition of a “Ugandan company”, one with 70% local staff, allows foreign-owned firms to open a branch in Uganda and be hired as a Ugandan subcontractor.

• A member of Uganda’s petroleum regulatory agency

Oil firms’ advantage Total and Cnooc, which formed a joint venture to tap into the 1.7 billion barrels discovered in northwestern Uganda since 2006, have the upper hand on President Yoweri Museveni’s administration in their fight over local content laws. For years, they have been successfully adding pressure on the government to avoid too much control over their subcontracts. The PAU seems powerless to stand up to the oil firms and a government anxious not to scare away investors with too strict controls. It does, however, have a manager assigned to the task Betty Namubiru. An economist by profession, Namubiru has been a frequent figure at all of the local content fairs and conferences in Uganda and Africa for the past two years, starting with the 2018 Africa Oil Week.

• Norwegian Ambassador in Ghana, Gunnar Andreas Holm with Aker Energy’s Country Director Mrs. Kadijah Amoah, in Accra. When will Aker Energy return to the Ghana project?

• Petroleum Commission officials and sacked employees of Schlumberger

• JONMOORE Limited recently hosted retirees. CEO Dr. Hilton John Mitchell praised the personnel for their contributions

LOCAL CONTENT

• Mozambique’s multi-billion-dollar LNG project is taking shape

Local Content Tensions Brewing in Mozambique

The Mozambican Ministry of Natural Resources, led by minister Max Tonela, has recently issued a tender call for

a consulting company to advise him on the controversial issue of local content. According to our sources, the tender call has been issued at the request of local content task force head Henrique Cossa, who is also an adviser to the minister. The mission will be entirely financed by the World Bank as part of its mining and gas technical assistance project. It would be an understatement to say that the local content issue is a problem in Mozambique. Since gas was discovered off the province of Cabo Delgado in 2010, the oil companies,

DPR Issues Prequalification Notice to Successful Bidders for Nigeria’s Marginal Fields

Anadarko, Total (block 1) and ENI/ExxonMobil (block 4), have done all they could to minimise their local content obligations, arguing that the 2014 decree setting out the practices to be adopted in this area is extremely vague. Estevão Pale, the new chairman of national oil company ENH, seems to be uninterested in local content, adding further justification to the delaying tactics of the foreign companies. With industry regulatory body Instituto Nacional de Petroleo (INP) unable to make the oil companies change position on the issue, the ministry took direct

charge of the affair some months ago. Total and ENI/ExxonMobil regularly advise the Mozambican authorities that pressure from local companies to apply higher levels of local content are counter-productive so long as the legislation is not clearer than it is at present. A webinar organised on 10 June by the newly created Mozambican Oil & Gas Chamber and its chairman Florival Ernesto Luis Mucavea brought a reaction from the oil majors, who complained about it to the INP and the ministry.

• The newly opened 17-storey office of the Nigerian Content Development and Monitoring Board (NCDMB) in Yenegoa.

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he oil majors, Total, ENI and ExxonMobil, are continuing to exert pressure on the state to avoid having to meet strong local content requirements. The Ministry of Mineral Resources and Energy is to take advice from a consulting company on the subject.

he Department of Petroleum Resources has issued notices to companies that were successful in their application to be prequalified for the ongoing bid rounds on 57 marginal fields in Nigeria. “Your pre-qualification application is successful,” the DPR wrote in a note to one of the successful companies. “A formal letter will be forwarded to you in due course,” the agency said on Friday. The DPR has not disclosed this publicly yet including the

details of all the companies that qualified. This could not be ascertained at the time of filing the report. Two weeks ago, Auwalu Sarki, Director of the Department of Petroleum Resources (DPR) said over 600 companies have applied to be prequalified for the

bid rounds, the first in almost 20 years. It is not expected that they would all be successful. Nigeria’s previous marginal fields bid rounds have not been short of enthusiasm the trouble has always been getting local oil companies that win the bids to develop the fields.

Many have been constrained by the volatile nature of oil prices which rubbishes the assumptions that fed their bids, others have had challenges raising financing. Some have also been ill-prepared and faced with uncertain government policy, they fail to develop the fields.

GAS

French Firms Dominate Mozambique’s LNG

• Mozambique’s President Felipe Nyusi received a French delegation led by Foreign Afraid Minister Jean-Yves Le Drian

Total’s arrival in Mozambique in September 2019, which marked a high point in France’s efforts to establish its presence in the southern African country, was only the cherry on the cake of a wider-ranging campaign in which French banks and companies were already heavily involved.

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President Filipe Nyusi’s government has once again succumbed to France’s charms. In mid-June, the government called in the Société Générale bank to advise state-owned oil company Empresa Nacional de Hidrocarbonetos (ENH). ENH needs to find $1.5bn for its contribution to the Mozambique LNG project, in which French major Total (26.5%) is operator and ENH a 15% shareholder.

Société Générale, which is already adviser on the project, replaced Britain’s Lion’s Head Global Partners on this new contract and its success is further evidence of France’s domination in the gas sector. Société Générale is not alone in Mozambique. French banks Crédit Agricole, BNP Paribas and Natixis are providing more than $1bn towards the cost of

ENI’s Coral South FLNG project, to which French public bank Bpifrance has granted an export guarantee of nearly $300m. Total the turning point Mozambican gas projects were for a time monopolised by the United States, with Anadarko on Mozambique LNG (block 1) and ExxonMobil on Rovuma LNG (block 4), but France regained some ground in September 2019 when Total acquired Anadarko’s African assets. Before the arrival of the French major, other French companies had been preparing the ground for several years. Oil industry services companies CGG (Compagnie Générale de Géophysique) and Schlumberger have been the top choice of Mozambique’s Instituto Nacional de Petroleo for seismic studies to enable it to assess the country’s hydrocarbons production potential. Franco-American group TechnipFMC has been another beneficiary of the boom. It was brought in first to build the Coral South FLNG with JGC Corp and Samsung Heavy Industries. It is also building most of the subsea

installations for the Mozambique LNG project (block 1) and, via an alliance with Fluor and JGC, is developing the shore-based installation for ExxonMobil’s Rovuma LNG project.

is Bertrand Noyelle, while the heads of the Netherlands’ Red Transport & Logistics and Shell groups’ operations in Maputo are respectively Aurélien Debacker and Alex Battaglia.

Gold rush

Deals between neighbours?

The Bolloré group also moved into Mozambique early. In March 2013, it built the country’s first oil terminal in Pemba. Bolloré Logistics Mozambique also supplies logistical services to South African energy and petrochemicals group Sasol, lead partner on the Pande and Temane gas project. Away from construction and logistics (where Bolloré is working alongside fellow French companies Foselev, AMT and Peschaud & Cie International), France has also broken into the catering market via Catering International & Services and Sodexo.

France has a geographical argument to back its claim in the Mozambican gas race. The gas installations on the Afungi Peninsula in the province of Cabo Delgado look out towards the French department of Mayotte. France also administers the Scattered Islands in the Mozambique Channel, over which Madagascar claims sovereignty.

A year before Total’s arrival on block 1, EDF concluded an agreement with Anadarko to buy 1.2m tonnes of gas from the two future gas trains on Mozambique’s Afungi Peninsula, which will be able to produce a total 12.8m tonnes per year. Other French companies have been inspired by these successes, among them engineering services company 3C Metal, headed by Philippe Boy, who a few weeks ago set up subsidiary 3C Metal Belmet in Maputo. Boy can expect to meet numerous French businessmen in Maputo, some of them working for other international groups, several of which have appointed Frenchmen to run their Mozambican branches. The managing director of Saipem, a subsidiary of Italy’s ENI group,

There is one shadow hanging over France’s involvement in the Mozambican gas adventure. In 2013, French shipbuilder Constructions Mécaniques de Normandie, a subsidiary of Privinvest, a company owned by Frenchman Iskandar Safa, supplied 30 fishing vessels to a Mozambican public sector fishing company. Officially, the boats were to serve to set up a tuna fishing fleet but an investigation carried out by business intelligence group Kroll for the International Monetary Fund subsequently found out that the boats deal had been used by several public sector companies, notably Ematum, Mozambique Asset Management and Proindicus, as a cover to divert funds towards the financing of a military programme. The aim was to offer surveillance services to oil and gas companies. In a report published in mid-June, the NGO Friends of the Earth accused the French state of having turned a blind eye to the financial scandal.

Eni to Explore Development Options for Gas Offshore Egypt Eni SPA and partners will screen development options for a gas discovery made through drilling the first exploration well in the North El Hammad license, in the conventional Egyptian waters of the Nile Delta. Eni SPA and partners will screen development options for a gas discovery made through drilling the first exploration well in the North El Hammad license, in the conventional Egyptian waters of the Nile Delta. The companies aim to fast track production through existing infrastructure. The Bashrush discovery lies in 22 m of water, 11 km from the coast and 12 km northwest of Nooros field and about 1 km west

of Baltim South West field. Both fields are in production (OGJ Online, Jan. 9, 2017). The well encountered a single 152-m thick gas column within Messinian age sandstones of the Abu Madi formation with excellent petrophysical properties. It will be tested for production. The discovery demonstrates significant Messinian gas and condensate potential in this sector of Egyptian offshore shallow waters and further extends gas potential west of Abu Madi formation reservoirs, discovered and produced from the Great Nooros area, Eni said. Eni will continue to explore Great Nooros by drilling exploration

well Nidoco NW-1 DIR on the Abu Madi West concession later this year. Eni, in participation with • A gas plant in Egypt

Egyptian Natural Gas Holding Co. (EGAS), is operator in North El Hammad with 37.5% interest through affiliate IEOC. Partners are BP (37.5%) and Total (25%).

GAS

Tema LNG Project Stalled by Covid-19 The Tema LNG project due to commence in the third quarter of 2020 has been delayed by the late arrival of key components, including the FRSU.

The project consists of a Floating, Storage, Regasification Unit (FRSU) with expected capacity of 250 MMscfd. Initial contracted supply amount is about 180 MMscfd. Helios Investments, which controls the project, has signed an agreement with China Harbour Engineering Company for the construction of an FRSU. Helios is reportedly in partnership with the Ghanaian private equity firm Lyndhurst Corp. The Accrabased company is headed by businessman Kwaku BoakyeAdjei, who worked for Tullow Oil in the past. Boakye-Adjei is also the managing director of Bluestar Exploration, an oil firm active on the Ghanaian permit Offshore South-West Tano alongside Heritage Oil and the national oil firm GNPC. Competent sources tell Offshore Africa that the late completion of work on the FRSU at shipyards in Singapore and China stalled its deployment at the Tema location. The delay was precipitated by the Covid- 19 paralysis.

LNG imports are expected to supplement domestic gas supplies in Ghana, to meet power and industry demand, particularly in providing feedstock for fertilizer (urea), alcohol (methanol) and other petrochemicals. Additional benefits include employment, taxes and royalties. However, some groups in Ghana have disagreed sharply. They claim Ghana currently has sufficient gas from its oil and gas fields, and that signing up to the Tema LNG project would saddle the people with more debts and higher electricity costs. They refer to the current agreement whereby the government is obligated to pay for the gas supplied, whether it is needed or not. Ghana currently produces around 405 MMscfd of gas, according to the Ghana Gas Company, with national demand said to be around 560 MMscfd. The West Africa Gas Pipeline is contracted to supply 120 MMscfd of gas to Ghana. But gas supply from Nigeria under the West Africa gas pipeline is very erratic. Overall, LNG offers a more expensive fuel option than conventional natural gas, but it is cheaper than crude oil.

Atuabo Gas Plant Expansion Talks Underway

lans are underway for the second phase of Ghana Gas Company’s gas processing plant at Atuabo, according to highly placed official sources in Accra. “The preparations are ongoing, and we are working with companies that can sponsor the project,” a senior official told Offshore Africa.

Since February, Tullow has produced 175 MM scf/d of gas at the offshore Jubilee field in a bid to boost oil production. However, Ghana has committed to utilizing only 125 MM scf/d

due to capacity constraints at the Atuabo plant. Subsequently, more than 50 MM scf/d of gas was being flared at the Jubilee field. Interestingly, Ghana imports nearly the same volume of gas from Nigeria daily through the West Africa gas pipeline. Reports say substantial amount of gas produced offshore Ghana is being reinjected or flared due to Ghana’s inability to utilise the resource. The Ghanaian government says it is exploring the transformation of Ghana Gas Company from gas processing and sales into an integrated gas firm. As part

of its aggressive domestic gas utilization agenda, Ghana expects to build 3,297-kilometres of 20-inch gas pipelines, at an estimated cost of $1.7 billion. The project will provide reliable, cost-effective fuel source for power driven economic activities in gold mining, cement and power production, cocoa and timber processing, ceramic, fruit processing, aluminum refining,

food processing, textile factories, cashew processing, shea nut processing, rice milling and iron ore mining. The second phase of the gas processing plant involves the construction of another 150- MM scf/d facility, also near Atuabo. Offshore Africa will bring you more details in subsequent editions.

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Ghana currently has a onebillion-dollar 150-standard cubic feet per day (scfd) gas processing plant, funded by a Chinese government loan. The Atuabo plant processes 120 MM scf/d of gas, mainly from the Jubilee and TEN fields, operated by Tullow Ghana. Tullow has committed to give Ghana 200 billion scf of free gas, and just about half of that has been utilized so far.

• Atuabo gas plant

COMPANY NEWS

Bentley Systems’ Acceleration Fund Announces the Launch of Virtuosity, a Bentley Company Bentley Systems, Incorporated, a leading global provider of comprehensive software and digital twins services for advancing the design, construction, and operations of infrastructure, today announced that its Acceleration Fund has invested in launching Virtuosity, a Bentley company. Virtuosity exclusively offers Virtuoso Subscriptions that bundle — with a Bentley infrastructure modeling, simulation, or construction application — the virtually delivered services of Virtuosity’s experts to accelerate and advance the success of an infrastructure practitioner. Virtuoso Subscriptions are now available, at virtuosity.com, for Bentley applications including MicroStation, OpenBridge, OpenBuildings, OpenFlows, OpenRail, OpenRoads, OpenSite, OpenTower, OpenWindPower, AutoPIPE, ContextCapture, LEGION, MOSES, PLAXIS, RAM, SACS, SoilVision, STAAD, and SYNCHRO, and Bentley’s iTwin Design Review cloud service. Virtuosity’s expert services, accessible through Virtuoso Subscription “keys,” include a range of training and one-to-one mentoring activities, and on-demand learning and content, increasingly integrated during actual application usage.

Allan Murphy, Virtuosity CEO, said, “The world’s infrastructure professionals have all gained a new appreciation for what can be achieved through online collaboration. We think this is the perfect time to inaugurate our commercial innovation: a virtuoso subscription that enhances the functionality of a software application through intrinsic assistance from subject matter experts. We’re marshalling and virtualizing our domain expertise to help every infrastructure practitioner perform with the confidence of a virtuoso!” About Virtuosity, a Bentley Company Virtuosity is the exclusive global provider of Virtuoso Subscriptions for Bentley Systems’ infrastructure modeling, simulation, and construction applications. Every Virtuoso Subscription—procured through the ecommerce site virtuosity.com—uniquely bundles, with a Bentley software application, virtually delivered services of Virtuosity’s experts to accelerate and advance the success of an infrastructure practitioner. About Bentley Systems Bentley Systems is a leading global provider of software solutions to engineers, architects,

• Bentley’s Allan Murphy

geospatial professionals, constructors, and owneroperators for the design, construction, and operations of infrastructure. Bentley’s MicroStation-based engineering and BIM applications, and its digital twin cloud services, advance the project delivery (ProjectWise) and the asset performance (AssetWise) of transportation and other public

works, utilities, industrial and resources plants, and commercial and institutional facilities. Bentley Systems employs more than 3,500 colleagues and generates annual revenues of more than $700 million in 172 countries. From inception in 1984, the company has remained majority-owned by its five founding Bentley brothers. www. bentley.com

OFFSHORE VOL.10.6

Cash-strapped Tullow Oil May be Forced to Sell More assets

In a delicate situation with the banks over its debts, Tullow Oil, the junior with the most extensive assets on the continent, is faced with some tough and urgent decisions.

by Kosmos Energy and Trident Energy, could figure high up the list of potential asset sales.

Having taken over the reins of Tullow Oil barely a month ago, the ex-Delonex boss Rahul Dhir does not have much time to get the company back on its feet. Its debts, standing at over one billion dollars, coupled with a slump in revenues due to sluggish production in Ghana this year and a barrel price ($40) much lower than in 2019, are creating serious difficulties for Tullow.

In late 2019, Tullow retained Natixis to sell part of its holding in Kenya’s 13T and 10BB blocks (reducing its stake from 50% to 30%), but the sale has been complicated by the unfavourable climate created by the Covid-19 pandemic and the fact that the Kenya finance and justice ministries are opposed to the contractual amendments negotiated with the petroleum ministry for the development phase.

On 15 July, its board approved the transfer of its Ugandan assets to Total for $575m, and other blocks could also be put up for sale to raise hard cash quickly. The company is understood to have a target of nearly $1bn in mind to help it to shore up its finances. Its stakes in Ceiba and Okume producing blocks in Equatorial Guinea, operated

• Rahul Dhir, Tullow Oil’s CEO since 1 July. ©Tullow Oil

Limited pool of potential buyers

And companies are not exactly queuing up to acquire these assets either. Backed the American asset manager Carlyle, Boru Energy, which was set up by Tullow Oil founder Aidan Heavey in 2019, may be interested in certain assets, and another company in which Carlyle has

a 30% stake, Neptune Energy, could be tempted too. Its main investor (with a 49% stake) is the sovereign fund China Investment Corp, and in 2018 it acquired Engie E&P assets in Algeria and Egypt. And lastly, Trident Energy, which is supported by the global private equity giant Warburg Pincus, might take an interest in certain blocks including those in Equatorial Guinea. Tullow was once worth an

estimated £15bn, but its value slipped below the one-billion mark back in March. On 18 March, Tullow’s share price reached an all-time low of £7.55 before rallying to over £30 in early June, but this is still half its pre-COVID-19 value in January 2020 and seven times lower than in October 2019, just before its then managing director Paul McDade was given his marching orders due to poor results in Ghana.

COMPANY NEWS

Huawei targets Angolan and Nigerian oil industries

• Oil ministers of Nigeria and Angola

aving made Africa’s oil industry one of its target markets, the Chinese telecoms giant Huawei already has a solid foothold in Algeria and Nigeria. Angola is next in its sights.

Chinese giant, CNPC, a megacontract to modernise the IT systems of the state-owned Sonatrach. However, the project has been plagued by numerous technical and linguistic hitches and the Chinese companies have been forced to call in a whole battalion of external consultants.

Nigeria and Algeria serve as testing grounds

Continental offensive

In February, the company persuaded the Nigerian government to select it as a partner in modernising the country’s oil industry and making its pipelines more secure. Its brief is to clamp down on the vandalising of facilities, which has been costing the industry several hundred thousand lost barrels a day. The deal was reached on the fringes of the Nigeria International Petroleum Summit held from 10 to 12 February in Abuja at which the head of Huawei’s Nigerian subsidiary, Tank Li, touted the merits of digitalising the oil industry using tools such as CCTV, predictive maintenance and secure networks. Huawei is hoping to replicate in Nigeria its success in Algeria, where in April 2019 the company won in conjunction with another

The telecom giant’s next target is Angola. Huawei has been winning friends among the country’s main oil industry players by sponsoring the Angola Oil & Gas conference being organised by the events management firm Africa Oil & Power, which is due to take place on 14-15 October of this year. This is a new departure for the technology provider, which to date has concentrated its efforts on the telecommunications sector. It is already an important partner of President João Lourenço’s administration and now wants to extend cooperation to the oil industry. With ambitions to establish itself throughout the continent, Huawei will also take part for the first time in Africa Oil Week (AOW), the major event in the African oil industry calendar which will be held in Cape Town

from 1 to 5 February 2021. Its energy business director in South Africa Zhang Ying will be representing the company at the event. In the meantime, the Covid-19 pandemic has been encouraging the holding of virtual events and Huawei is jointly planning with AOW organiser Hyve Group the Data to Barrel: Huawei Oil & Gas Virtual Summit 2020 conference scheduled for 15 July. Still unpopular in the West This African honeymoon stands in sharp contrast to Huawei’s current struggles in the Western world. The United States, whose intelligence services suspect the

company of seeking to install electronic surveillance tools in its 5G technologies, has been vigorously lobbying European Union states to distance themselves from Huawei. The British government under Boris Johnson has indicated that it wants to reduce its dependence on Chinese technology while France, which is sensitive to the American lobbying, is dithering over whether to use Huawei equipment for the rolling out of 5G on its soil. The company has denied any involvement in espionage and has accused Washington of waging a battle against China for exclusively commercial motives.

Chad’s New Oil Bill in the Works replace the law of 2006, which was amended in 2010. According to our sources, Barthélemy Faye, a partner at the Paris branch of Cleary Gottlieb Steen & Hamilton, has been asked to assist the interministerial commission, which is composed of senior figures at the oil, finance and environment departments.

• Chad’s President Deby

After several months of preparation, the Chadian oil ministry, which for the last year has been headed up by Mahamat

Hamid Koua, is putting the final touches to the new hydrocarbons bill. Once it has been voted through by parliament, it will

The principal new measure in the bill is the gradual phasing out of concession contracts in favour of production sharing agreements (PSAs). ExxonMobil and Petronas have had a concession at Doba since the late 1990s, while China’s CNPC has a

mixture of concessions and PSAs depending on the type of licence. Through its subsidiary Caracal Energy, Glencore has PSAs only for its Mangara and Mandila fields.

The new arrangements are unlikely to make much difference to ExxonMobil: a few years ago the American major renewed its concession, which is due to run for more than a decade, and under the new bill, concession contracts will become PSAs when they come up for renewal. However, both ExxonMobil and Glencore are looking to withdraw from the country.

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The Chinese new technologies giant Huawei, which has been targeting the market for the digitalisation, surveillance and real-time monitoring of oil industry facilities, has been focusing its energies on the African continent over the last year.

GULF OF GUINEA

CRUDE REALITY: African Producers Struggle with OPEC Quotas

fter having failed to respect its OPEC quotas in May and June, Gabon is now trying to increase the pressure on producers to stick to the organisation’s rules. • An OPEC+ meeting in Vienna

12 April by OPEC and 10 or so other oil-producing countries with the aim of reducing global production by 10% by 1 May. Congo produced an average 312,000 bpd in May, which is to say barely less than its 325,000 bpd output in 2018, which is serving as the basis for calculating the reduction, and way more than its 250,000 bpd crisis quota. Gabon, however, has seen its output soar, rising from 187,000 bpd in 2018 to 226,000 bpd in May 2020, when it was not supposed to go over 144,000 bpd.

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Saudi Arabia conciliatory

Gabonese Oil Minister Vincent de Paul Massassa finally asked hydrocarbons director JeanFélix Obamba in June to contact Gabonese oil companies as quickly as possible to get them to reduce their production by at least 20%. According to our sources, some have already taken action. Maurel & Prom, which is owned by Pertamina, agreed in mid-June to reduce its output from 28,000 bpd to 22,000 bpd. Assala Energy, which bought all Shell’s producing fields in Gabon via fund manager Carlyle, has not yet taken action, preferring to wait for the ministry’s hydrocarbons department to set its production targets on a fieldby-field basis. Total is thought not to have yet made production

cuts. The newcomer in the Gabonese offshore sector, BW Energy, was unable to drill the two production wells it planned on its Hibiscus find in March. These would have enabled it to increase production on its Dussafu block from 16,000 bpd at present to 22,000 bpd. The company, which is in partnership with Panoro Energy and Tullow Oil, considers, therefore, it has respected the production reduction rules by force of circumstance. OPEC’s bad boy Gabon and the Republic of the Congo are the two countries which have shown least respect for the instructions issued on

Faced with this backsliding, OPEC’s leading oil-producing countries like Saudi Arabia have agreed that the fall in production should be introduced over several months. Angola and Nigeria, like Congo and Gabon, failed to respect their quotas in May and June and will need to reduce their production in July and August. Some African countries have shown better behaviour. Algeria and Equatorial Guinean both respected their May quotas. While the Gulf nations have implemented further cuts, Nigeria and Angola were lagging in full compliance, meeting only 77% and 83% (respectively) of their quotas. It took a phone call from Saudi Arabia’, which advises OPEC+s Crown Prince Mohammed bin Salman to Nigerian President Muhammadu Buhari at the end of June to get Nigeria to commit to production

cuts to OPEC ‘s approved 1.37 million barrels per day. Export figures showed Nigeria exported 1.38 million barrels the previous month. Nigeria had previously ignored calls for OPEC production cuts in the past, as the country enters a recession which may be its worst in 40 years, caused by weak global demand for its number one export, crude oil. Two sources told Offshore Africa that Angola has pledged to improve its compliance with the quotas and to make up for its May and June overproduction by cutting more in July to September. “Angola has agreed to comply as per (its agreement) with the JMMC,” one of the sources said, referring to the OPEC+ panel, the Joint Ministerial Monitoring Committee (JMMC), which advises OPEC+. The good news is that OPEC+ is easing restrictions n production, beginning from August till the end of the year, according to an OPEC statement. The cuts have been reduced from 9.6 million barrels per day (bp/d) to 7.7 million bpd. Even more cheering news is that OPEC expects demand for its crude oil to rebound sharply next year, surpassing levels seen before the coronavirus crisis. OPEC forecasts the need for crude oil will surge by 25 percent to average 29.8 MMbpd, higher than the level required in 2019, according to a monthly report.

Massive Discount on FPSO Lease for Aje Field, off Lagos 40%! That is how much the partners on Aje (OML 113) managed to get off their lease for the FPSO deployed to the offshore field that sits off the coast of Lagos. The field operator, Yinka Folawiyo Petroleum, was able to convince the new FPSO owner, Century Group, to substantially reduce its fees. Century was founded by Ken Etete, the nephew of Dan Etete, who served as minister of petroleum under Sani Abacha. Yinka’s chief executive, Yinka Folawiyo, may have told Etete, a close friend, that the company

might have to stop production on Aje if it was unable to contain the cost per barrel, especially with the Covid-19 pandemic bringing oil prices down. Century Group bought the FPSO deployed on Aje, the Front Puffin, from Singaporean firm Rubicon Offshore International for $15m. Etete also had to make a 35% cut to the FPSO maintenance costs at the operator’s request. He had already managed the vessel when it was owned by Rubicon. Yinka Folawiyo Petroleum operates the 3,500-bpd Aje field alongside Norwegian-UAE

firm Petronor, New Age and the Nigerian ADM Energy. Aje is

Nigeria’s only producing oil field outside of the Niger Delta.

GULF OF GUINEA

Glencore, Vitol in the Race for Anadarko’s Ghana Assets

he defunct US firm Anadarko’s producing assets, now in Oxy’s hands, are attracting crude sellers and well-heeled juniors.

• Anadarko’s stake in Ghana’s Jubilee is up for grabs

Total gave fair warning: if Algeria’s energy ministry opposed its takeover of Anadarko’s blocks, it would end discussions to get hold of the US firm’s fields in Ghana, contenting itself with those in Mozambique and South Africa. After buying Anadarko in 2019, Occidental Petroleum (Oxy) now finds itself with blocks in Africa, specifically in Algeria and Ghana, that it doesn’t want.

Glencore’s ultimate goal is to market Oxy’s 30,000 bpd share of fields currently operating by Tullow Oil. Trafigura initially showed interest, but ultimately opted not to make Oxy an offer. The Swiss trader has just signed a pre-financing arrangement with Kosmos Energy to extract some

of its crude in the United States and Ghana. Trident Energy, headed by Perenco’s former CEO, Jean-Michel Jacoulot, is also said to be interested in teaming up with Kosmos Energy to take over Oxy’s assets in Ghana. What of Boru Energy and Vitol? Other companies are thought to be keen on the purchase, such as Boru Energy (founded in 2019 by Tullow’s former chairman Aidan Heavey), which is putting together a consortium with trading company Vitol for this purpose. Despite boasting a $1bn line of credit from the Carlyle investment fund, Boru does not yet have any assets. According to our sources, it was Carlyle that advised Boru to get in touch with

Vitol. The trader is, like Glencore, keen to market the crude in play. Boru’s business model, based on buying producing licences operated by majors and juniors, is a perfect match for the stake Oxy wants to get rid of in Ghana. Moreover, Boru’s management knows the country well, especially operations director David Lawrie, who worked on these deposits for Tullow Oil for many years. Finally, Savannah Energy, which operates blocks R1, R2, R3 and R4 in Niger as well as active gas assets bought from Seven Energy, is reportedly also in the running.

Accra stirs the pot By threatening Total and Oxy with a $500m capital gains tax on the deal, Ghanaian Finance Minister Ken Ofori-Atta has played a major role in prompting the French major’s withdrawal. That sum, disproportionate to the size of the assets, is thought to have been designed to ensure some these holdings go to local companies. Cornered, Oxy is currently forced to stay in Ghana: the US firm needs quick money after the fall in crude prices and given the unprofitability of shale oil and gas in the United States, from which most of its production derives. With lower oil prices, Oxy can expect to earn between $800m and $1bn from these Ghanaian fields.

Nigeria’s Pelfaco woos Mercuria over Saunda

igerian national Gesi Asamaowei, head of Pelfaco, the company that operates the Congolese offshore block Saunda Marine, hopes to ditch this asset before the year is out. This is because the oil ministry headed by Jean-Marc Thystère Tchicaya asked for a $5m bonus at the start of 2020 when Sauda Marine was given a production permit. Pelfaco does not want to pay this sum on its own.

Pelfaco hopes to sell most or all of its 85% stake (the remaining 15% is owned by SNPC) in order to make the payment. According to our sources, the new operator of the adjacent Marine XI block, the Geneva-based trader Mercuria, is looking closely at the data. ENI, Sauda Marine’s previous operator, made several discoveries there, but the reserves turned out to be small.

If Pelfaco fails to find a rescuer by January, it could lose all rights over the block.

OFFSHORE VOL.10.6

The firm has appointed its vice president in charge of strategic planning, Sunil Mathew, and its director of business development, Brennan Campbell, to find a buyer for its Ghanaian assets. According to our sources, the productive Jubilee and TEN (Tweneboa, Enyanra, Ntomme) fields, respectively 27% and 9% owned by Oxy, have enticed several traders such as Glencore to set up consortia to acquire them. Glencore is reportedly eager to team up with Ghana’s Springfield Energy, headed by the well-connected Kevin Okyere, and the state-run Ghana National Petroleum Corp.

GULF OF GUINEA

Covid-19 Puts African Energy on Pause

iscoveries have been almost non-existent since the pandemic, and investments in the power sector have stalled despite urgent need When Covid-19 became a pandemic in February, most analysts feared it would impact the oil and gas industry disproportionally hard in subSaharan Africa. Unfortunately, this prediction has come to pass.

Global discovery volumes have understandably been weak so far this year. Discoveries of conventional resources were the lowest of any H1 of the 21st century, at just 4.9bn bl boe, according to data and analytics company Rystad Energy, with average monthly discoveries down 34pc. But Africa accounted for less than 1pc of these volumes, while Russia, South America and the Middle East accounted for a combined 73pc. The Covid-19 lockdown, travel restrictions and associated logistical issues were certainly major factors. While these difficulties had little effect on the testing and completion phases, they caused delays for projects

in the initial and ongoing drilling phases that required crew changes, according to Rystad.

Sub-Saharan Africa has so far recorded a low Covid-19 death toll; but the ultimate outcome remains to be seen and even today’s figures are obscured by a low level of testing. The World Health Organization (WHO) predicts that a quarter of a billion people in Africa are at risk of contracting the virus in the next year, and that the disease will last for several years. Angola had put a new royalty and tax regime in place to attract IOCs and address years of declining production, with the aim of replacing 750,000bl/d of its declining 1.38mn bl/d 2019 output to at least maintain volumes. But capital spending cuts induced by Covid-19 may have thrown a wrench into the country’s plan. “Angola desperately needs to accelerate its new developments to reduce its declining production and must undertake more exploration to replace its depleted reserves. Despite the government’s efforts to make operations in the country more operator-friendly, investors

• Kosmos Energy donated 2,500 masks and various infrared thermometers to the Permanent National Secretariat in Equatorial Guinea

may quit Angola unless the government acts swiftly,” says Siva Prasad, senior upstream analyst at Rystad Energy. Vulnerable Recoverable oil reserves have also declined. For example, Nigerian potential reserves are expected to fall 6bn bl, according to Rystad figures. But smaller or new producer countries may be even more vulnerable due to the need for building associated infrastructure. The pandemic has also impacted midstream development. “One of the primary strategies that a

majority of pipeline operators have been falling back on, is to halt or delay any avoidable current or upcoming projects,” says Haseeb Ahmed, oil and gas analyst at data analytics firm GlobalData. “With uncertainty looming large on the prospective projects, pipeline companies are compelled to make tough decisions to keep operations running.” For example, Ahmed notes that the contractor of the NigerBenin pipeline has halted all construction activities, and it is unclear when it might start commercial operations.

Crew Kidnappings Soar in West Africa

rew kidnappings and violent attacks on vessels in the oil-rich West Africa region have soared in 2020, with 77 seafarers taken hostage or kidnapped for ransom since January, according to the ICC International Maritime Bureau’s (IMB) latest piracy report.

OFFSHORE VOL.10.6

• Suspected pirates arrested by the Nigerian Navy

Just a fortnight ago, pirates attacked BW Offshore’s Sendje Berge FPSO offshore Nigeria, and kidnapped nine Nigerian nationals were kidnapped. Initial reports indicated that explosives were used during the attack. In total, IMB’s Piracy Reporting Centre (PRC) recorded 98 incidents of piracy and armed robbery in the first half of 2020, up from 78 in Q2 2019. The increasing threat of piracy adds to hardships already faced by hundreds of thousands of seafarers working beyond their contractual periods due to COVID-19 restrictions on crew rotations and international travel.

The Gulf of Guinea off West Africa is increasingly dangerous for commercial shipping, accounting for just over 90% of maritime kidnappings worldwide. Meanwhile, ship hijackings are at their lowest since 1993, the report said.

“Violence against crews is a growing risk in a workforce already under immense pressure,” says IMB Director Michael Howlett. “In the Gulf of Guinea attackers armed with knives and guns now target crews on every type of vessel. Everyone’s vulnerable.”

Gulf of Guinea and held captive on land for up to six weeks. Rates are accelerating, with 32 crew kidnapped in the past three months alone. And they are happening further out to sea: twothirds of the vessels were attacked on the high seas from around 20 to 130 nautical miles off the Gulf of Guinea coastline. IMB PRC urges vessels to report any attacks promptly. It can then liaise with coastal agencies, international navies and vessel operators, encouraging a quick response to deter piracy and armed robbery and improve the security of seafarers. The Piracy Reporting Centre also broadcasts to shipping via GMDSS Safety Net Services and email alerts to Company Security Officers. “We need to change the riskto-reward ratio for pirates operating within the Gulf of Guinea. Without an appropriate and proportionate deterrent, pirates and robbers will get more ruthless and more ambitious, increasing the risk to seafarers,” says Howlett.

NIGERIA-MARGINAL FIELDS

PGS Data Covers Key Blocks for Nigeria’s 2020 Bid Round

he PGS Nigeria MultiClient data library provides excellent 2D and 3D seismic coverage over recently announced blocks in the 2020 Marginal Fields Bid Round. The Department of Petroleum Resources (DPR), on behalf of the Federal Government of Nigeria, recently launched its 2020 licensing round. A total of fifty-seven marginal fields are on offer, including a number in shallow-water terrains. PGS MultiClient Data Available for Evaluation of Blocks

MegaSurveys are merged finalstack 2D and 3D datasets which enable evaluation of basins in

• PGS 3D seismic line over a block in the Nigeria Marginal Fields Round 2020 highlighting potential rotated fault block traps and shallow DHIs in the Agbada Formation.

“PGS is delighted to offer this superbly located 3D data to support the Nigerian Marginal Fields Round, and enable participating companies to gain a competitive advantage in their geological understanding”, says PGS New Ventures Manager, Joshua May.

extensional province of the Niger Delta’s structural zones. Regional data gives a detailed overview of complex tectonics related to the Akata Shale Formation movement and diapirism. The Niger Delta Basin formed during the Late Cretaceous and is dominated by up to 12 km of Late

paralic shales. Proven reservoirs in the basin are dominated by unconsolidated sandstones of the Eocene to Pliocene aged Agbada Formation, deposited as stacked turbidite channel and fan complexes. The shallow-water blocks of the 2020 Marginal Fields Bid Round cover two main structural provinces directly linked to the gravity-driven movement of the Akata Shale Formation. The blocks proximal to the coast are situated in the extensional province, whilst the outboard blocks transition into the diapir province. Both provinces are dominated by complex structures that generate excellent trapping potential. The largest accumulations are found in roll-over anticlines in the foot-walls of growth faults, but hydrocarbons may also be found in fault closures and subtle stratigraphic traps. In the image below, direct hydrocarbon indicators (DHIs) are highlighted in the footwalls of faults, indicating how MegaSurvey data can be used to easily identify remaining potential in this extremely hydrocarbon-rich basin.

• Location of the Nigeria Marginal Fields Round 2020 blocks and the PGS MultiClient data library for Nigeria

a regional context, including visualization of different plays and hydrocarbon migration pathways on a large scale. They act as a mechanism for exploration analog-building and opportunity identification.

Extensive Data Coverage Provides Regional Understanding The PGS MultiClient library provides widespread data coverage over the inboard

Tertiary aged clastics deposited in an upward-coarsening regressive deltaic sequence. The main source rocks are Akata Formation marine shales and Lower Agbada Formation

OFFSHORE VOL.10.6

The PGS Nigeria MegaSurvey complements offshore blocks of the 2020 Marginal Fields Bid Round, offering prospective block licensees the opportunity to integrate 3D seismic data with available horizon interpretation into block evaluations to gain an understanding of prospectivity in key areas offshore.

DOWNSTREAM

Africa Grapples with Petrol Tensions

Petrol prices are back to preCOVID levels, in some cases are even more expensive, as motorists and commuters groan under the weight of rising prices. The picture is grimmer in Africa where most countries import refined fuel despite the continent being a key oil producer. Fuel station operators are constantly adjusting retail rates in line with spiraling fuel costs. For example, in Kenya, fuel prices in July jumped by the biggest margin since Kenya started controlling fuel prices in 2010 on costly crude prices and a thirteen-fold increase in the Petroleum Development Levy, ending the era of cheap petrol that started in April. Kenyan motorists are paying Sh91.87 per litre of diesel from Sh74.57, representing a Sh17.30 increase, and Sh11.38 more for a litre of super petrol at Sh100.48. The Energy and Petroleum Regulatory Authority (EPRA) linked the expensive fuel to the recovery in crude oil prices, which increased the cost of imported refined fuel, and the increase in the petrol levy to Sh5.40 from S0.40, representing

a 1,250 percent rise.

In Ghana, over the weekend of June 19-21, Shell and GOIL, two of the country’s largest oil marketers, increased their prices by 4 percent, in addition to the 8 percent, bringing the total increase to about 12 percent within a week. Petrol sells at levels witnessed before the pandemic and further increases are expected. The combined increase in the depreciation of the local currency Ghana Cedi against the US dollar, the world’s major trading currency, added to the rise in prices of crude oil in the international market, have put pressure on pump prices in Ghana, noted Accra-based Institute of Energy Security (IES). Nigeria, Africa’s largest oil producer, relies heavily on importation for petrol and other refined products as its refineries have remained in a state of disrepair for many years. The Nigerian National Petroleum Corporation has, until recently, been the sole importer of petrol into the country, after private

marketers stopped importing the commodity due to crude price fluctuations, among other issues.

In July, the Nigerian government, through the Petroleum Products Pricing and Regulatory Agency (PPPRA) adjusted the fuel price from N121.50 to N143. “After a review of the prevailing market fundamentals in the month of June and considering marketers’ realistic operating costs, as much as practicable, we wish to advise a new PMS pump price band of N140.80 -N143.80 per litre for the month of July, 2020,” it said. South African motorists witnessed further increases at the pump in August. A price hike of around 34 cents per litre of petrol and 68 cents for diesel was introduced. The latest price change follows substantial hikes over the past two months. Importation of fuel for August in Tanzania was expected to increase by 52 percent and 30.9 percent for diesel as compared to July, following the resumption of economic activities that were paralyzed by Covid-19 pandemic. There was however no indication

• Petrol prices are rising again

of an immediate fuel price hike. In Uganda, high cost of transport has significantly driven up headline inflation for the period ending June, according to Uganda Bureau of Statistic (UBOS). The cost, which almost doubled at the start of the month of June, has spiked inflation in Uganda, increasing to 4.1 percent for the year ended June, compared to 2.8 percent in May. Transport costs have a significant impact on the economy given that they feed into all structures of economic activities, both within and beyond Uganda. Sudan’s annual inflation accelerated to 136.36 percent in June from 114.23 percent in May, driven by food and fuel prices, the statistic office in Khartoum said.

OFFSHORE VOL.10.6

Dangote advances construction of Lekki integrated refining complex

Dangote Oil Refining Co. is proceeding with installation of key equipment at its long-planned 650,000-b/d grassroots integrated refining and petrochemical complex now under construction in southwestern Nigeria’s Lekki Free Trade Zone.

Sulzer has been selected as the sole supplier of column internals, packings and trays for the world’s largest single train refinery at Dangote complex. Nigerian conglomerate Dangote Industries Ltd. (Dangote Group) subsidiary Dangote Oil Refining Co. is proceeding with installation of key equipment at its long-planned 650,000-b/d grassroots integrated refining and petrochemical complex now under construction in southwestern Nigeria’s Lekki Free Trade Zone. Sulzer Chemtech Ltd.—the sole supplier of column internals, packings, and trays for the project—has completed design and supply of internals for all of the refinery’s columns, which

contractors are now currently installing at the site under guidance of Sulzer’s engineers, the service supplier said on July 6. As a result of multiple rounds of design checks, engineering studies, and discussions with technology licensors, Sulzer Chemtech was able to redesign the internals for what was to be the complex’s previously planned 500,000-b/d refinery to suit its revised 650,000-b/d capacity without expanding the equipment footprint.

The plant will not only help Nigeria meet its own fuel demand and become self-sufficient, but will also add Nigeria to the list of top global exporters of gasoline, diesel, aviation jet fuel, as well as other petrochemicals and petroleum-based products, such as polypropylene (PP), Sulzer Chemtech said. Now scheduled to be completed by yearend 2022, Dangote’s $12-billion Lekki integrated complex—which will become the world’s largest single-train

• Dangote refinery

refinery upon commissioning— will include the 650,000b/d crude distillation unit, a 3.6-million tonne/year PP plant, a 3-million tpy urea plant, and gas processing installations to accommodate 3 bcfd of natural gas that will be transported through 1,100 km of subsea pipeline to be built by Dangote Group. Sulzer Chemtech said the refinery will have various processing units containing more than 65 columns and requiring more than 15 static mixers. Major processing

installations will include a residue fluid catalytic cracker, mild hydrocracker, alkylation unit, naphtha hydrofining unit, as well as continuous catalytic reforming units for production of gasoline and diesel meeting Euro 5-quality standards and jet fuel adhering to international aviation specifications. The complex will be equipped to produce a combined 33 million tpy of petroleum products, including gasoline, diesel, kerosine, aviation fuel, and other petrochemicals.

DOWNSTREAM

Azikel Lets Contract for Nigerian Modular Refinery

Azikel Group subsidiary Azikel Petroleum Ltd., Abuja, has let a contract to McDermott International Ltd. to provide engineering and procurement (EP) services for its previously announced 12,000-b/sd hydroskimming modular refinery in Obunagha-Gbarain, Yenagoa, Bayelsa State, Nigeria. As part of its work under the EP contract, McDermott will deliver detailed engineering and design of the inside battery limits (ISBL) modular refinery, as well as supply of equipment and all tagged items within the ISBL, the service provider said on July 14. McDermott—which will execute engineering and design on the project from its offices in Tyler, Tex., and Mexico City—said it will source equipment for the project from both US and international suppliers. Valued at between $50-250 million, the EP contract award follows McDermott’s previous work with Azikel Petroleum on the refinery, the most recent of which included delivery of extended front-end engineering design (FEED) services for the project, McDermott said.

• Illustration from Azikel Petroleum Ltd. Computer generated aerial view of refinery in Obunagha-Gbarain, Yenagoa, Bayelsa State, Nigeria.

Azikel has completed extensive site-preparation works for the project, including site reclamation and backfilling, as well as completion of roads, a perimeter wall, drainage, and security gates. Alongside construction of crude oil feedstock tanks, ongoing early works at the site also include construction of administrative, maintenance, and terminal operator buildings. Construction also remains under way on a 656ft pier with shoreline protection, which will be used for delivery of refinery modules and other equipment to the site, according to McDermott. Project overview Previously planned for startup in 2018, the modular refinery’s ISBL unit—a contract for delivery of which Azikel Petroleum previously awarded to Ventech Engineering LLC, Houston—will

include units for production of high-quality variants of LPG, gasoline, kerosine, aviation fuel, diesel, and heavy fuel oil. To be built on modules mounted on skids and equipped with an unspecified reforming technology from Honeywell UOP LLC to produce reformate that will be blended to produce a premium motor spirit (PMS; gasoline) with an 89 research octane number clear (RONC), the modular refinery include ISBL and outside battery limits (OSBL) areas, according to Azikel Petroleum’s website. The ISBL will consist of the following processing units: • Crude distillation unit with debutanizer. • Naphtha hydrotreater. • Naphtha splitter. • Catalytic reformer.

• Diesel hydrotreater. • Gasoline stabilizer. Specifically, the ISBL unit will be equipped to produce the following: • PMS; 8,866 b/sd. • Automotive gas oil (AGO); 1,090 b/sd. • Kerosine-jet fuel; 1,452 b/sd. • Off gas, mixed LPG; 200 b/sd. It is located along a 192,000-sq m stretch of former swampland that has now been cleared, destumped, filled, and reclaimed with 2.7 million cu m of sand, The refinery will receive a reliable feedstock of Nigerian Bonny Light crude and condensate via pipeline directly from Royal Dutch Shell PLC’s Gbarian-Ubie Shell gas gathering facility at the site’s eastern boundary, according to Azikel Petroleum.

Cape Town Refinery Investigating Cause of Fire

stron Energy (Pty) Ltd. is investigating a fire that broke on early on the morning of July 2 at its 100,000-b/d refinery at Milnerton, Cape Town, South Africa. Astron Energy (Pty) Ltd. is investigating a fire that broke

out early on the morning of July 2 at its 100,000-b/d refinery at Milnerton, Cape Town, South Africa. The fire, which occurred around 4:00 a.m. local time, has been contained, and while the plant is now stable, all work at the site has been suspended, Astron said in a release.

While details regarding the location of and possible damages caused by the fire were not disclosed, Astron confirmed the incident resulted in the deaths of two employees and injured seven others, two of which remain in hospital to undergo treatment for injuries. While City of Cape Town fire services and emergency services

remain at the scene, there is no danger to surrounding communities. The company, which immediately activated its emergency response procedures upon the fire’s occurrence, also said it has notified all relevant authorities. The incident, however, poses no immediate threat to fuel supplies, according to the operator.

OFFSHORE VOL.10.6

zikel Petroleum Ltd. has let a contract to McDermott International Ltd. to provide engineering and procurement services for its previously announced 12,000-b/sd hydroskimming modular refinery in ObunaghaGbarain, Yenagoa, Bayelsa State, Nigeria.

TECHNOLOGY

Cloud, Artificial Intelligence (AI), and 5G Reshaping the Oil and Gas Industry

ndoubtedly, the oil and gas industry has entered an extremely difficult period and is witnessing changes, the likes of which have not been seen for over a century

well-logging and reservoir identification, and seismic first arrival wave identification, extracting significant value from underutilized — formerly ‘useless’ — data. New ICT Technologies Reshape the Oil and Gas Industry: Huawei Offers a Wealth of Experience Today, 150 years after the first successful extraction of oil from a drilled well, accessible underground oil resources have been all but exhausted. Oil companies, by necessity, are therefore now exploring deep-water, pre-salt, and unconventional reservoirs.

The Huawei Oil & Gas Virtual Summit 2020 exploring ‘Data to Barrel’ — was successfully hosted online in July. The summit gathered together global customers, industry partners, and thought leaders — including representatives from the Abu Dhabi National Oil Company (ADNOC), Schlumberger SIS, and the former Chief Information Officer (CIO) of French giant TOTAL — to share their experiences of helping oil and gas companies increase profits while cutting costs, creating added value through digital transformation.

OFFSHORE VOL.10.6

The Oil and Gas Industry Faces Upheaval: Huawei is Positioned to Help

In the first half of 2020, due to the global economic downturn amid the spread of COVID-19, international oil prices fell to a low of 30 dollars per barrel. In May, West Texas Intermediate (WTI) crude oil futures prices even turned negative, a historically unprecedented event. Undoubtedly, the oil and gas industry has entered an extremely difficult period and is witnessing changes, the likes of which have not been seen for over a century. Huawei has been working hard to help oil and gas customers cope with these current challenges. David Sun, Vice President of Huawei’s Enterprise Business Group and Director of the Global Energy Business Department, noted that, over the past decade,

Huawei has partnered with customers in the oil and gas industry and together witnessed oil prices peak at 120 dollars per barrel, as well as fall to that low of 30 dollars. Along the way, Huawei’s role has changed — and upgraded — with the support and help of oil and gas companies. Evolving from a vendor that simply provided switches, routers, and network devices, to becoming a full partner dedicated to providing digital transformation solutions, Huawei works with partners and customers alike to jointly promote the application of 5G, Artificial Intelligence (AI), and big data in the oil and gas industry. It continues to explore new technologies and applications, where solutions to the current challenges lie. Indeed, using elastic computing, big data analytics, AI, and cloud data centers, Huawei has already helped oil and gas customers achieve digital transformation, promoting the construction of intelligent oilfields and increasing oil and gas reserves. Working with partners, Huawei planned and built a computing AI platform for an industry customer, to implement AI training and big data analytics. This has, in turn, led to an increase in both oil and gas reserves and in production. Indeed, solutions have been implemented in various scenarios, including artificial-lift fault diagnosis,

At 60 years old, Daqing Oilfield — the largest oilfield in China, situated in Heilongjiang, the country’s northernmost province — has faced enormous challenges in terms of reserve replacement, stable production pressure, cost reductions, and efficiency improvements. At the Huawei Oil & Gas Virtual Summit 2020, Zhang Tiegang, former Deputy Chief Engineer of the Exploration and Development Research Institute at Daqing Oilfield, explained that seismic exploration technologies to detect oil and gas reserves have been the method of choice for most oil companies. Increasing seismic exploration while decreasing well drilling, he noted, has become a new measure widely used in the industry. However, high precision and massive data processing have brought their own challenges to seismic exploration and oilfield exploration and development. With a single seismic exploration work area now expanded to over 2000 square kilometers, the volume of data collected through the broadband, wide-azimuth, and high-density seismic data collection technology has exceeded 1 TB per square kilometer. To help Daqing Oilfield address these issues, Huawei built a dedicated oil and gas exploration cloud. The cloud data center improves computing power by eight times and has similarly

improved prestack seismic data processing capability by five times, from 400 square kilometers to 2000 square kilometers, matching work area requirements. Elsewhere, AI and big data capabilities have been used to re-analyze 10 PB of the customer’s historical exploration data, to mine new value from it and support extraction decisionmaking, bringing huge additional value to the oilfield. Huawei is empowering a wide range of industries through 5G networking. In the oil and gas industry, 5G technologies are changing the operation modes of seismic data collection. Huawei has put 5G network features to work — including high bandwidth, wide connectivity, and low latency — to help achieve high-speed backhaul of seismic data, reducing the manual cabling workload and significantly improving the efficiency of seismic data collection. Elsewhere, Huawei 5G networks are already being used in oilfields and stations to support robot inspection, drone inspection, and Augmented Reality (AR) and Virtual Reality (VR) applications. Additionally, the Huawei Horizon Digital Platform helps oil and gas customers break down legacy siloed service systems and quickly release service applications as microservices, to meet the complex and changing needs of the industry. For example, Huawei has deployed an enterprise cloud for SONATRACH, the national state-owned oil company of Algeria. The cloud-based solution manages and coordinates multiple data centers, eliminates resource silos, and greatly improves overall operation efficiency. As a global ICT solutions provider, Huawei is committed to bringing digital to every oil and gas company. Indeed, Huawei is already working with 19 of the top 30 oil and gas companies, in 45 countries and regions around the world, helping them achieve digital transformation. Source: Huawei

MINING

China’s Shandong Aims to Take on Barrick, Newmont and AngloGold in Ghana

n bidding to take control of Cardinal Resources, which is developing Ghana’s Namdini gold field, China’s Shandong Gold aims to compete with the world’s gold industry giants, all of which have a permanent presence in West Africa.

On 18 June, Hong Kong law firm King & Wood Mallesons, which specialises in handling business dealings between Asia and the rest of the world, registered a bid implementation agreement concluded between Australia’s Cardinal Resources and its client, China’s Shandong Gold Mining Co., at the Shanghai stock exchange. The proposition Shandong has offered A$0.60 per share for control of Cardinal, which is developing Ghana’s Namdini gold mine, as well as exploring other potential gold mining sites in the west African country. It has set itself the target of obtaining at least 50.1% of Cardinal’s capital and is ready to withdraw its bid

if it fails to attain that figure. Cardinal’s board recommended its shareholders accept the bid as soon as it became official. Shandong is now due to submit a detailed statement regarding its offer “on or about” 21 July. According to Cardinal’s advisers - the banks BMO Capital Markets and Maxit Capital, the financial service companies Canaccord Genuity Corp and Hartleys, and the law firms HopgoodGanim Lawyers and Bennett Jones, the Chinese firm’s bid is very attractive. Cardinal’s share price stood at “only” A$0.46 when the offer was formally lodged on 18 June. Big league Shandong intends to use the takeover to break into one of

the world’s major gold mining areas, West Africa’s Birimian rocks. All the world’s leading gold producers have mines in the area. Barrick Gold Corp. has the Loulo-Gounkoto (Mali) and Tongon (Ivory Coast) mines, Newmont Corp the Ahafo and Akyem (Ghana) mines, AngloGold Ashanti the Siguiri mine (Guinea) and the Iduapriem and Obuasi mines (Ghana) and Kinross Gold Corp the Chirano mine (Ghana). In mid-March Russia’s Nordgold, which already operates mines in Guinea and Burkina Faso, also showed interest in acquiring Cardinal but the Cardinal board has made no comment on its bid. If it succeeds, Shandong, which is China’s second biggest mining company by extraction volume, will look to compete with the giants of the sector by working in close proximity to them. At the end of March, moreover, Cardinal’s mining licence at Namdini was extended from 19km² to 63km², which would enable Shandong to extend the

scale of its mining operation and thus increase the amount of gold it can extract from it. At present, average production is expected to average 287,000 ounces per year over 15 years on a deposit thought to represent a total 5.1 million ounces. All-out expansion Shandong has massive ambitions. It is increasingly looking to break out of China by buying up projects at an advanced stage of development. In early May, it offered to buy Canada’s TMAC Resources, which has several gold projects in its home country, including the Hope Bay project with inferred resources totalling 2.1 million ounces. A few days later, on 25 May, Shandong set up a Canadian subsidiary, Streamers Gold Mining Corp., to finalise the transaction.

Gold Price Hits Nine-year Peak on Stimulus Talks

OFFSHORE VOL.10.6

Gold prices continued to ascend in July, reaching their highest levels in nine years, as a softer US dollar and expectations of more stimulus measures to resuscitate pandemic-hit economies provide further support for the safehaven metal.

Spot gold rose 1.2% to $1,839.58/ oz by 11:30 a.m. EDT, having touched the $1,840/oz mark earlier in the session. US gold futures for August delivery advanced 1.3% to $1,840.80/oz after hitting $1,843.80/oz earlier, the highest for a most-active contract since September 2011. Spot gold is one of this year’s best performing assets, with prices up almost 20% “Gold is deriving strength from a broadly weaker dollar despite the improving market mood,” FXTM analyst Lukman Otunuga told reporters. The dollar eased 0.1% against major currencies after touching a more than fourmonth low. Gold’s resilience also defied a gain in global equities on the European Union’s historic

750 billion euro ($857 billion) stimulus plan and hopes for coronavirus vaccines.

Gold is finding support from discussions about new fiscal stimulus, UBS analyst Giovanni Staunov told Reuters. Widespread stimulus tends to support gold because the metal is widely viewed as a hedge against rising prices and currency debasement.

Revealed in a recent poll, gold prices are expected to push towards record highs over the next 18 months as the coronavirus crisis encourages investors to hoard the metal as a hedge against possible turmoil in the wider markets. The poll of 42 analysts and traders returned a median forecast for gold to average $1,713/oz in 2020 and $1,800/

oz in 2021 – a significant rise from projections of $1,639/oz and $1,655/oz in a similar survey back in April.

“The more uncertainty over the control of the virus and by association the global economy, the more bullish for gold,” said StoneX analyst Rhona O’Connell, adding that prices could reach record levels above $2,000 in 2021. Spot gold is one of this year’s best performing assets, with prices up almost 20% and above $1,800/oz for the first time since 2011.

ABOUT OFFSHORE AFRICA

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Welcome to Offshore Africa magazineAfricaâ&#x20AC;&#x2122;s top oil and gas publication. Offshore Africa is a monthly title that provides its readers with a wealth of articles discussing expert opinions, analysis, emerging trends, growth opportunities and challenges facing the oil and gas industry in Africa, and Ghana in particular.

The magazine is a definitive and invaluable resource for those seeking to keep up with the energy industry as it offers a rich insight. A must-read, must-have publication, Offshore Africa is distributed via digital platforms, via email to subscribers and vendors.

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Africaâ&#x20AC;&#x2122;s leading oil and gas magazine also seeks to help advertisers connect with consumers in a timely and costeffective manner, at competitive rates that maximizes their marketing budget. It provides advertisers with the right exposure.

OIL & GAS PEOPLE

Chariot Kenya Power Appoints Eng. CEO steps Elizabeth Rogo to its Board down Larry Bottomley has stepped down as CEO of Chariot Oil & Gas Ltd.

ng. Elizabeth Rogo, Founder & CEO of TSAVO Oilfield Services and President for East Africa at the African Energy Chamber has been appointed NonExecutive Director on the Board of Kenya Power and Lighting Plc, Kenya’s state utility company.

households and industries for several years. The company is a key pillar of the country’s Vision 2030, which aims to transform Kenya into a newly industrializing, middle-income nation. By handling most of Kenya’s power transmission and distribution, Kenya Power is the most crucial fighter against energy poverty in the country.

Kenya Power has been making steady progress towards providing safe, secure and reliable electricity to Kenyan

“Elizabeth is solidly proenergy for all and for economic expansion. Elizabeth understands that having

• Elizabeth Rogo

sustainable power is key for creating jobs and spreading economic prosperity across Kenya. We have no doubt that she will bring the highest ethical standards to executing her job,” stated NJ Ayuk, Executive Chairman at the African Energy Chamber.

Jean-Daniel Blasco leaves Total E&P’s North African purgatory • Adonis Pouroulis, acting CEO of Chariot Oil and Gas.

The company has appointed Adonis Pouroulis, currently nonexecutive director and founder, as acting CEO.

Jean-Daniel Blasco left the post he had held since 2011 as North Africa director at Total’s exploration and production (E&P) division on 1 July to work as senior advisor to CEO Patrick Pouyanné. His successor has not yet been appointed, but some of his duties have already been assigned to other branches.

In addition, Julian MauriceWilliams and Duncan Wallace have joined the board as executive directors as CFO and technical director, respectively.

Pascal Bréant now represents Total at Mabruk Oil Operations, a joint venture with the Libyan National Oil Corp that has been operating the Mabruk field since

Larry Bottomley has stepped down as CEO of Chariot Oil & Gas Ltd.

1994. Bréant is the vice president for North Africa and the Middle East of Total New Ventures. Does this mean the French giant is planning to start from scratch in Libya? Blasco hardly had an easy ride in his previous role; far from it. The outbreak of the conflict in Libya has severely disrupted Total’s operations there - the Mabruk field was attacked in 2015 - and the company is paying the price for French support to rebel general Khalifa Haftar. Problems

• Jean -Daniel Blanco

have also piled up in Algeria, including the government’s blocking of the acquisition of Anadarko’s assets, the delay in the production of the Ahnet field and the changes in Sonatrach’s management since the fall of the Bouteflika regime.

OFFSHORE VOL.10.6

Total’s Adewale Fayemi Spearheads Oil Industry Lobbying in South Africa

Since taking over at the helm of the South African subsidiary of the French major Total in August 2018, the Nigerian Adewale Fayemi has become the leading private sector player in South Africa’s oil industry. It seems that Total chief executive Patrick Pouyanné made the right call in mid-2018 when he appointed the Nigerian Adewale Fayemi, aka “Wale”, as head of the company’s South African branch, for which the major has grand ambitions. Since then, Fayemi has established himself as a key voice in the oil industry’s dealings with the administration of President Cyril Ramaphosa, particularly in relation to imminent changes in legislation governing the oil sector.

Lobbyist in chief In recent weeks, Fayemi has been relentlessly lobbying the South African government and parliament to finally vote through the Petroleum Bill, which has now been pending for several years. The oil companies are concerned that bureaucratic delays are putting off potential investors. Appointed without fanfare in late 2019 as head of OPASA, the association that defends the interests of offshore operators in the county, the Nigerian has been following the progress of this bill closely. In the first quarter of this year, OPASA was asked to canvas the views of its members - who in addition to Total include ENI, ExxonMobil, New Age and Sasol on the planned legislation, a draft

of which was published in late December. Total first Meanwhile in June, with the country still in the midst of the Covid-19 crisis and its economy idling, Fayemi and his teams secured exceptional permission to deploy the Deepsea Stavanger platform to South Africa so that Total can drill Block 11B/12B, which it operates alongside Qatar Petroleum (QP) and Africa Energy Corp. The rig, which departed from a Norwegian shipyard in early July, will take 55 days to reach South Africa. Fayemi was previously in charge of the French major’s operations in Uganda and Ivory Coast, as well as its deep offshore projects in Nigeria.

• Adewale Fayemi

OIL & GAS PEOPLE

Francis Fannon, at the Vanguard of Trump’s African Oil Diplomacy US Secretary of State Mike Pompeo’s Mr Energy makes further inroads into Africa. Because of the Covid-19 pandemic, it was via videoconference that on 30 June US Assistant Secretary of State for Energy Resources Francis Fannon mounted his latest diplomatic offensive into Africa. He was invited to speak during an online gathering, the Africa Ministerial Roundtable: Covid19’s Impact on Africa’s Energy Sector, organised by Senegal’s oil minister, Mouhamadou Makhtar Cissé and the OECD’s International Energy Agency. A host of African ministers took part. Fannon welcomed the tax breaks Uganda has given to oil companies. As we revealed, after protracted efforts, French giant

Total and Tullow Oil managed to get Yoweri Museveni’s government to agree to a very preferential deal on Total’s purchase of Tullow’s stake in the Tilenga project. The arrangement was backed by the American lobbyist, who is keen for extraction to start as soon as possible. General Electric is involved in building the 60,000-bpd Kaabale refinery, which will be supplied by Lake Albert reserves now being jointly extracted - in the wake of Tullow’s departure - by Total and CNOOC. America first Appointed to his newly created post in 2018, Fannon made his African media debut 18 months later, in November 2019, when he attended the Africa Oil Week extravaganza in Cape Town. In

• Francis Fannon

his speech, he railed (without actually mentioning China by name) against “opaque forces” that could lead African countries in a trap of debt and dependency. Fannon, who used to work in

mining giant BHP Billiton’s corporate affairs division, also knows the oil sector well, having worked for the Murphy Oil Corporation, which is mainly active in Australia, Brazil, Mexico and South Asia.

Metallon Mining Boss Mzi Nyimpini Mabunda Khumalo Tries His Luck Appointed CEO for General with Nigerian junior Lekoil Electric in Southern Africa

ining company Metallon Corp, which was founded by South African businessman Mzi Khumalo, has just become the leading shareholder in Nigerian oil junior Lekoil. In June and July, Metallon acquired a 13% stake in the Lekan Akinyanmi-headed company, which is active in Nigeria on OPL 310 (17%), OPL 276 (45%), the marginal Otakikpo field and OPL 325 (in which it has a 62% indirect stake).

General Electric (GE) has announced the appointment of Nyimpini Mabunda as the Chief Executive Officer for Southern Africa. In this role, Nyimpini will lead GE’s growth in the region and drive alignment across its Power, Healthcare, Aviation and Renewable Energy businesses. He will also drive GE’s BBBEE roadmap and processes in South Africa.

The two mines, which are in the firing line of the company’s creditors, were put into corporate rescue proceedings in midFebruary. Metallon now only has the How Mine in Zimbabwe. The company is also in the sights of the Zimbabwean judiciary, which suspects it of having illegally transferred funds to foreign accounts between 2009 and 2012 without the approval of the Reserve Bank of Zimbabwe. Away from mining, Khumalo is represented in the South African telecommunications sector via Great Lake Telecom.

With a career spanning 23 years, Nyimpini is an accomplished business leader with a track record of consistent performance and business transformation across FMCG, Telecoms and Financial Services having occupied senior roles in Sales, Marketing, Strategy, Digital Transformation and Innovation. He has worked for global and leading multinational businesses such as Vodacom, Diageo, and Procter & Gamble. He has spent the last 7 years working across markets in the United Kingdom, Nigeria, Uganda, South Africa, Ghana, Cameroon, Kenya and Tanzania. Prior to joining GE, Nyimpini was a Senior Advisor for the Boston Consulting Group and

• Nyimpini Mabunda

before that, he led Vodacom’s largest division, the Consumer Business Unit as Chief Executive for about 3 years responsible for commercial strategy and execution. He was appointed as Non-Executive Chairman of ‘Gammatek’ and Non-Executive Director of ‘The Beverage Company (Bevco)’, both owned by Ethos Private Equity. He serves as a Non-Executive Director at Octodec Investments Ltd., a property loan company listed on the Johannesburg Stock Exchange. Nyimpini holds a bachelor’s degree in Social Science, a Post Graduate Diploma in Marketing Management and an MBA from the University of Cape Town.

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• Mzi Khumalo

Metallon, which was for a time Zimbabwe’s leading gold producer, is in great difficulty in the southern African country. Heavily in debt, it sold its holdings in the Shamva mine in early July to Landela Mining Ventures, a company owned by Zimbabwean business magnate Kuda Tagwirei, and is also preparing to get rid of its mine in Mazowe.

electronic NDT measurement device to an aerial robotic system. The use of aerial robotics systems for NDT is still a new and novel application utilizing existing technologies such as DFT, SP, UT, etc. electronic measurement readers, drones, etc. with a system of complex integrations that allows for a better application FEATURE of science. Aerial Robotic NDT systems have the potential to improve the inspection, testing and data collection aspects of coated and uncoated assets, in part, by making the NDT measurement process easier and safer thusThe allowing for more frequent measurements and/or aBased larger quantity of measurement samples. Testing Emergence of Contact Nondestructive With an easier, faster, and safer method to collect NDT measurements from locations of height we atnondestructive Height testing Utilizing Aerial Systems can expand the NDT science of by collecting data fromRobotic locations whereDrone data was either inaccessible or difficult to obtain (access issues,Robert safety considerations, etc.). The patented aerial robotic L. Dahlstrom, Apellix system discussed in this paper flies up to a structure with a metal sub-straight, then full autonomous ultrasonic gauges, etc.) are used A “robotic arm” is a under type a copy of the full data in the Introduction to nondestructively measure of mechanical arm, usually onboard computerand/or in the software control, touches a NDT measurement probe (such as a DFT, SP, UT, etc.) to the target and records At least one company has thethickness of a nonmagnetic programmable, with similar local operations computer. This the corrosion monitoring measurement data compliant with SSPC, ISO, ASTM, APIinnovation or otherwas named a 2017 developed a way to locations take coating on ferrous substrate, the functions to a humanarm. thickness of a metal substrate, “Robotic arms” may include Corrosion Innovation of theyear standards. NDT measurements at height by transferring the etc. Accordingto a major a manipulator and may be by the National Association of The contribution of thisNDT paper includes the development and testing of a new robotic platform able to handheldelectronic manufacturer of these devices; connected by joints allowing Corrosion Engineers (NACE).xi measurement device to an aerial take semi-autonomous remote UT Measurements and NDT measurements remotely. "Most coatings on other steel and either rotationalmotion (such

Future iterations of the Aerial robotic system. The use of aerial iron are measured this wayii". as in an articulated robot) Robotics system are scheduled robotics systems forNDT is still NDTmagnetic gauges work or translational (linear) to include the ability to conduct a new and novel application via magnetic/electromagnetic displacement. The terminus statisticallyvalid random samples utilizing existing technologies induction and measure the or end of thearm is called the of a predefined surface area and such asmeasurement DFT, SP, UT, etc.devices have Electronic DFT a inlong history of measuring ferrous Robotic sub straights. According change magnetic fluxdensity “end effector”.ix “end automated sampling consistent electronicmeasurement readers, i at the surface of a magnetic effectors” are the device at the (aka to Wikipedia the first ultrasonic thickness gauge was made in 1967 . These electronic NDT devices with variousmeasurement drones, etc. with a system probe as it nears a steel surface. end of a robotic arm, designedto standards. magnetic film gages,integrations eddy current ultrasonic gauges, etc.) are used to nondestructively measure theThe image below of complex that gauges, By measuring the flux density, interact with the environment. shows a representative example for a better applicationof thethickness of the coating can Theof exact nature substrate, of this deviceetc. According thickness ofallows a nonmagnetic coating on ferrous substrate, the thickness a metal of one such aerial robotic science. Aerial Robotic NDT be determinediii. NDT eddy depends on the application of the ii". NDT to a major manufacturer thesetodevices; "Most coatings on steel and iron are measured this waysystemtaking an automated systems have the of potential current electronic magnetic robot.x measurement improve the inspection, testing gages use a constantpressure magnetic gauges work via magnetic/electromagnetic induction and measure the change in magnetic flux via an electronic The “Aerial Robotic” measurement device onboard the and datacollection aspects of probe to provide thickness density at the surface of a magnetic probe as it nears a steel surface. By measuring the flux density, measurement system presented aircraft. the coated and uncoated assets, readings frequently shown on iii. NDT eddy current electronic in this paper and presentation part,coating by makingcan the NDT magnetic gages use a constant thickness ofinthe be determined a liquid crystal display (LCD) The Aerial Robotics DFT includes a roboticarm with measurement process easierand withmeasurement tolerance of measurement pressure probe to provide thickness readings frequently shown on a liquid crystal display (LCD) with system works as OTC-30788-MS an end effector. The system safer thus allowing for more ±1%iv. The image below shows iv. The uses computer controlled frequent measurements a image measurement tolerance of ±1%and/or below shows example of one such follows. handheld a representative exampleaofrepresentative larger quantity of measurement one such handheldelectronic electronic measurement device. samples. measurement device.

Background: Use of Electronic NDT Measurement Devices

With an easier, faster, and safer method to collect NDT measurements from locations of height wecan expand the science of nondestructive testing by collecting data from locations where data was eitherinaccessible or difficult to obtain (access issues, safety considerations, etc.). The patented aerial roboticsystem discussed in this paper flies up to a structure with a metal sub-straight, then under Image 3—Aerial Robotics DFT Measurements Testingxii full autonomoussoftware control, touches a NDT measurement heavy-lift multi-rotor drones • as The tethered (for data and The Aerial Robotics DFT measurement system works follows. probe (such as a DFT, SP, UT, outfitted withvarious sensors power) or untethered (battery etc.) to the target and recordsthe and functions to allow precisely power and wireless The tetheredcontrolled (for data flight and power) power anddata) wireless data) robotic sy corrosion monitoring locations close to or untethered (battery robotic systemis located close measurement data compliant is located close to the structure where NDT measurements are to be taken. structures. Manual control to the structure where NDT with SSPC, ISO, ASTM, API or is unable to The operatorof/ suchsystems pilot opensv the computer or tablet measurements and with the software interface chooses to are to be taken. Image 1—Representative Photo of handheld digital testing device otherstandards. accomplish the precise flying (operator, job name, upper and lower limits for the • Image 1—Representative Photo of and enters the vtest the job information handheld digital testing device • The operator / pilot opens the and maneuvers required; thus The contribution of this paper readings, etc.). In this example, it is a DFT measurement for and SSPC-PA2 standards to t computer orset tablet with software-controlled flight includes the development and New “Aerial Robotic” spot readingsiscrucial. within aThese 10’ by 10’robots area. the software interface chooses aerial testing of a new robotic platform beginthe test and2 enters Measurement The aerial robotic system takes off vertically totoapproximately meters in height, hover utilize the existing electronics able totake semi-autonomous the job information (operator, and digital probes to perform Methodology completes self-checks. remote UT Measurements job name, upper and lower NDT radio frequency and other NDT measurements The operatorNDT thenmeasurements.The uses a standard handheld transmitterxiii to manually fly the sy There are now a few drone limits for the NDTreadings, measurement electronic systems remotely. close to the where the DFT readings the "gate" orit"window". companies and at least one etc.).i.e. In this example, is are identical those used forare to be taken. Aerial Robotics and Safety Once the aerial roboticmeasurements, system is within meters from set thefor target part of the struc DFT2measurement “manual” i.e. the "gate"a(i.e. Background: Use Company which hasdeveloped, digital testing the operator thehandheld chooses "Start Test" on the software SSPC-PA2 interface.standards to take of Electronic NDT and is bringing to market, a 5spot readings within a 10’ by devices. The system then operates under full computer control (no manual input allowed) fly's in, tou Measurement Devices new method to take contact10’ area. the at surface with the probe and Platform takes a minimum of three DFT measurement readings (typica The Aerial Robotics based NDT measurements Electronic DFT measurement • The aerial robotic contains height. Thedrone-basedto NDT 5 seconds). It thenonboard backs NDT away, the pilot then repositions the system system, and repeats the pr devices have a long history of takes off vertically to measurement electronics from measurement systems typically until 5 spot measurements have been recorded. measuring ferrous sub straights. approximately 2 meters in a leadingmanufacturer and consist of a manually operated Accordingto Wikipedia the first height, hovers andcompletes DFT time, readings drone with an attachedprobe The operatorthat is ablestreams to see,the in real the DFT readings data and whether or not they are in compl ultrasonic thickness gauge was self-checks. and data in real time to the contains a NDT measurement with the pre-programmed standards. After landing the operator has the option to download the full made in 1967i. These electronic user interface on the base device. An Aerial Robotics system • The operator then uses a NDT devices (akamagnetic film record which in addition to all the DFT readings, includes additional information such as locat station(ground control) computer includes a “robotic arm” andan handheld radio gages, eddy current gauges, and environmental data, etc. Thestandard image below shows a representative examp or tablet, and in addition saves “end effector”.coordinate data, weather

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•

• • •

• •

one method for displaying measurement data on a laptop or tablet.

Image 4—Real Time DFT Measurement User Interfacexiv

A similar system is used for UT (sometimes abbreviated as UTT, Ultrasonic Thickness Testing) following the same steps listed above for the DFT system. The image below shows a representative example of aerial robotic system taking UT measurements on an elevated structure.

FEATURE

score of 0.000000013. Using one thickness reading the t score with a valueof 49 for isdisplayed to the the degrees of freedom, a .05 pilot the corrosion significance level and a twoengineer or observer tailed hypothesis, the resulting can see on their user P-Valueis 1. Thus, the result is interface on a tablet • Once the aerial robotic system not significant at p < .05. The or portablecomputer is within the “gate” (i.e. 2 P-Value is the probability that the the entire stream of meters from the target part OTC-30788-MS difference betweentwo samples, UT readings as they of the structure)the operator or the difference between a are gathered in real chooses “Start Test” on the sample and the theoretical time by the onboard software interface. effector. The onboard computer,systems. via theFurtherall embedded software programming, signals the pump to pus result, is entirely due to chance. xix. Thetable below shows the with a structure to the data is collected couplant to the couplant injection point a short time interval prior to making contact • The system then operates statistical data results fromeffector the by theshows onboard under full computer control a UT measurement. The image below a representative example of an end on an aerial ro test. computer providing a (no manual input allowed) system for taking UT measurements. full auditable record. fly’s in, touchesthe surface Table 1—T-Testxx The image below with the probe and takes showsa representative a minimum of three DFT Treatment Control Image 5—Aerial Robotics UT Measurements Testing Statistic example of aerial measurement readings (robotic) (manual) each contact with a structure. robotic system’s first-person UT measurements require the application of a couplant gel to the measurement probe tip prior to taking (typically 1to 5 seconds). It Below is a design used by one average 5.7694 5.8585 xvi reading end effector at the terminus of the articulatingviewer robotic arm requires mechanism (FPV) live avideo stream then backs away, athe pilot . Thus, thecompanyto dispense couplant on Below is a design used by one company to dispense the couplant prior to each contact with a structure. from anonboard camera while SD .0966 .0289 then repositions the system, the tip.There There a reservoir to dispense couplant on theprobe probe tip. is aisreservoir of couplant gel on the aircraft and a pump and taking UT measurements on an and repeats the processuntil 5 to a small of couplant gel onthat the aircraft motor connected diameter tubing rungs the length of the robotic arm and attaches to the end n 50 50 elevated structure. The video spot measurements have been and a pump andmotor connected image is overlaid withdata The conclusion of the study recorded. to a small diameter tubing that to assist the pilot with flight found no statistically significant rungs the length of the robotic The operator is able to see, in 6 OTC-30788-MS operations. differences in the measurements. arm and attaches to the end As statedin the conclusion, “One Efficacy of the Data would expect there to be little collected by an “Aerial difference between the value of the readings withthe Robotic” Measurement xvii robotic Image 6—Aerial Robotics UT Measurement End Effector system vs. a person holding an System electronic DFT measurement The robotic system The aircraft operator (i.e. the pilot) has a view from the onboard video camera fro author of this paper device and the statistical xxi published a study testing the enabling user interface on the tablet or portable computer them to visually see the aircraft operation proofagreed.” efficacy of aerial systems the end effector making contact with robotic a structure. The pilot also can see on the user interface the thic Relevance to the for taking DFTmeasurements at reading provided by the onboard UT thickness measurement device. While only one thickness read height consistent with SSPCOffshore Oil & Gas displayed to the pilot the corrosion engineer or observer can see on their user interface on a tablet or po PA2 standards. The Society Industry for Protective Coatingsas (SSPC) computer the entire stream of UT readings they are gathered in real time by the onboard systems. Fu Image 4—Real Time DFT Measurement User Interface The atechnology is important standards for providing all the data is collectedpromulgates by the onboard computer full auditable record. The image below s now and in the immediate NDT measurements including A similar system is used for UT (sometimes abbreviated as UTT, Ultrasonic Thickness Testing) following effector. Theaonboard computer, representative example of aerial robotic system's first-person viewer (FPV) live video stream fro real time, the DFT readings future to unmanned facilities the same steps listed above for the DFT system. The image shows a representative example of aerialcommonly used standards for via below the embedded software onboard camera while paint taking UT measurements on an elevated structure. The video data andtaking whether or not they robotic system UT measurements on an elevated structure. and remote operationsfor Oil image is overlaid thickness measurements programming, signals the pump are in compliancewith the & Gas infrastructure, including (DFT). Otheroperations. standards for DFT data to assist flight to push thecouplant to the the pilot with pre-programmed standards. Offshore. The Aerial Robotic include ISO 19840 or IMO PSPC. couplant injection point a short After landing the operator has time interval prior to making the option to download the full contact with a structure to takea datarecord which in addition to UT measurement. The image 7 all the DFT readings,OTC-30788-MS includes below shows a representative additional information such effector. The onboard computer, via the embedded software programming, signals the pump to push the example of an end effector on an as locationalcoordinate data, couplant to the couplant injection point a short time interval prior to making contact with a structure to take aerial roboticsystem for taking a UT measurement. The image below shows a representative example of an end effector on an aerial robotic weather and environmental UT measurements. for taking UT measurements. data, etc. The image system below shows a representative example ofone method for displaying measurement data on a laptop or tablet. frequency transmitterxiii to manually fly the systemclose to the where the DFT readings are to be taken. i.e. the “gate” or “window”.

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xiv

A similar system is used for UT (sometimes abbreviated as UTT, Ultrasonic Thickness Testing) followingthe same Image 6—Aerial Robotics UT Measurement End Effector Image 5—Aerial Robotics UT Measurements Testing steps listed above for the DFT Image 7—Aerial Robotics UT Measurements Testing Pilot User Interface Viewxviii The robotic of system aircraft gel operator (i.e. the pilot) has probe a view tip from the onboard video camera from the UTsystem. measurements require the application a couplant to the measurement prior to taking The image below shows user interface on the tabletThe or portable computer enabling them to visually see the aircraft operations and robotic system aircraft a readingxvi. Thus, the end effector at the terminus of the articulating robotic arm requires a mechanism the end effector making contact with a structure. The pilot also can see on the user The interface the thickness a representative example of null hypothesis ofby the an study"Aerial operator (i.e.Efficacy pilot) has to dispense the couplant prior toreading each provided contact with structure. isthe a design used byaone company System described inMeasurement this paper of the collected Robotic" Syste theaonboard UT Below thickness measurement device. While onlyData one thickness reading is 35 aerialrobotic taking UT by the ordifference between the to dispense couplant onsystem the probe tip. There a reservoir of from couplant on thecanaircraft and user a pump andwas view onboard displayed to theispilot the corrosion engineerthe orgel observer seevideo on their interface on a tablet portable affordsafer, cheaper, and better ondiameter ancomputer elevated motormeasurements connected to a small tubing that rungs length of the robotic arm and to end of time this paper study testing the NDT efficacy of aerial robotic systems for taking the entire streamthe of UT readings as The they areauthor gathered inattaches real bythe the onboard systems. Further twopublished groups is 0,ai.e. the difference camera from theuser interface on measurements and allow a all the data is collected by the onboard computer providing a full auditable record. The image below shows structure. betweenthe mean of the the tablet portable computer measurements height consistent The Society Protective Coatings (S more robust viewpointfor into assets a representative example of aerial roboticor system's first-person viewerat(FPV) live video stream from anwith SSPC-PA2 standards. onboard camera while taking UT measurements elevated structure. image is overlaid with by the handheld enabling themontoanvisually see The video measurements conditionsthan the slower and UT measurements require the data to assist the pilot with flight operations. device taken by a person and the the aircraft operations andthe more expensive manual method. application of a couplant gel to mean of the measurementstaken end effector making contact By operating these aerial robotic the measurement probe tip prior by the handheld device on the with a structure. The pilot also systems in offshoreenvironments, to takinga readingxvi. Thus, robotic system is zero. They can see on the user interface safety and economic benefits are the end effector at the terminus tested on a sample of 50 average the thicknessreading provided achieved. of the articulating robotic readingmeasurements from each by the onboard UT thickness arm requires a mechanismto However, these aerial robotic group (d.f. = 49) produced a t measurement device. While only dispense the couplant prior to xv

xvii

Image 7—Aerial Robotics UT Measurements Testing Pilot User Interface Viewxviii

Efficacy of the Data collected by an "Aerial Robotic" Measurement System The author of this paper published a study testing the efficacy of aerial robotic systems for taking DFT

FEATURE systems are not suitable for all conditions especially in their nascent state as an emergent technology. While early adopters stand to gain the most from implementing these systems,they are also assuming the most risk until the systems become the industrial standard, which there is every indication they will be. The current operational capabilities of the systems described in this system very. For example, the one provider of these systems this paper is based on has a tethered system, with shore power(groundbased power transferred up the tether) that is limited to the length of the tether which is

currently100m or approximately 330 feet. The battery powered untethered version has a longer operational range but a more limited operational time which is approximately 15 minutes. Further, given the unforgiving and harsh environmental conditions typically found at offshore Oil &Gas facilities these systems need further “hardening” for the more unforgiving environmental and other conditions. Remote operations in offshore and marine environment include such variables as high winds and exposure to the corrosive effects of saltwater. One of the major

companies the produces these aerial robotic NDT systems has experience operating them with Oil & Gas refineries, chemical and industrial manufacturing facilities, and for the US Navy via one of the prime contractors to the DOD.

Conclusion Using handheld digital testing devices to take Nondestructive Testing (DNT) measurements at height canbe dangerous and time consuming. When possible, working at heights should be eliminated as part the hierarchy of fall protection stipulated by both OSHA and ANSI. There

are a few drone companies and at least one Aerial Robotics and safety company that take contactbased NDT measurements at height. An Aerial Robotics system includes a “robotic arm” and an “end effector” allowing for software control as opposed to drone-based systems that are manually flown. The system described in this paper operates under full computer control (no manual input allowed) fly’s in, touches the surface with the probe and takes NDT measurements. Studies have shown there is no statistically significant differences in the measurements taken manually or by the robotic system.

Reservoir Modelling in 3D Susan Fellows, Computer Modelling Group Ltd A geologist turned reservoir engineer makes a plea to fellow reservoir engineers to use all the tools at their disposal, including studying 3D visualisations to better understand hydrocarbon reservoir simulations. Reservoir Modelling in 3D

OFFSHORE VOL.10.6

People see the world in different ways. Some people have red/ green colour-blindness; some people have acute myopia; nearly all people have some form of astigmatism; some people have synaesthesia; some people cannot see at all; some people choose not to see at all.

on daily walks in the Wiltshire countryside where I live – another chalk manifestation, smeared with clay by Ice Age scouring – I amuse myself by ‘undressing’ the landscape, and reconstructing the aeons. I see the world in three dimensions. To me, it is natural. I do not believe I can look at the world in any other way; whether surface or subsurface, it is a threedimensional environment. I have not, however, spent my career working as a geologist. In the way that life twists and turns, I subsequently moved into reservoir engineering, where I recognised that those who inhabit this discipline, coming from a background in physics or engineering, do not see the world in the same way as myself. 3D is not their viewpoint.

I am a geologist by training. A childhood obsession with dinosaurs did not, in fact, lead to a lifetime fascination with ancient life, due to the necessity of dissecting rats during biology classes, which had no appeal whatsoever. At 14 years old, geography and ancient landscapes beckoned instead. Raised in the Weald in south-east England, with the undulating chalk curves of the North and South Downs encompassing the horizons, and the valleys in the middle alternating their sticky clay and crumbling sandstones, geomorphology and thus palaeolandscapes and geology became my fascination. To this day,

Use the 3D Model Since the mid 1990s, subsurface software has become increasingly abundantly provided with 3D modelling capabilities. The subsurface workflow is an intricate pattern of surfaces, planes, logs and cross-sections, all dissected and recompiled, with the almost single-minded objective of building a 3D model of the hydrocarbon reservoir –

the static model – which is then passed to the reservoir engineer for dynamic modelling, and fluid flow analysis. At which point, although I appreciate why the geological understanding is inclined to evaporate, so, unfortunately, does any desire to look at the dynamic model in 3D, despite the fact that the entire previous workflow has been focused on creating just that. Yes, endless 2D plots of production profiles, bottomhole pressure, cumulative production etc. are produced, but to actually ‘look’ at the reservoir to understand the behaviour, is most often the last course of action, if it is taken at all. Rather, the cause of a problem in the simulation is sure to be found in those 2D lines, or in Excel spreadsheets… When still a junior reservoir engineer, I was lucky enough to accompany a senior simulation expert to the Intera offices in Henley, where the first simulation 3D visualisation tool was being developed. We sat there with the developers, and cautiously, watched the eclipse simulation deck loading in this new tool. Slowly, the model appeared in 3D. In the middle of the model was a big hole. There was a silence, and then someone asked: “Is that meant to be there?” To which the reply was, “Actually, no …”. Since those early days, I have forgotten how many times I have discussed an issue with a colleague, and asked, “Have you looked at the model in 3D?”, to which the inevitable answer is, “No”. So we take a look, and find, for example, that the reason the

well is producing only water is that it is perforated in the water leg; that the reason for early water breakthrough is that there is a high permeability streak in the model, due to an incorrect multiplier; that the reason for the convergence problems in the box model was that it was divided into four quarters (for which the reservoir engineer had no real explanation), and one of the quarters had four times the porosity of the other three quarters, which the engineer could not explain. All these things require meticulous checking in the simulation input deck, but are quickly identified in the 3D visualisation.

A Tool for Simulation Engineers I generalise of course, but with a strong undercurrent of truth. In the reservoir engineering world, 2D comes first, with 3D most often used as a way of demonstrating what is happening to management, rather than as a tool for the simulation engineers themselves. We cannot change the way people think, or how the individual brain maps its surrounding world, but we can ‘choose to see’ when the option is there in front of us, on our desks.

BUSINESS BRIEFS

Zenith Applies for New 25-year License for Offshore Congo Field drilling equipment. Oil storage and processing facilities are a 45-minute drive from Point Noire and 17km from the nearest refinery.

Zenith’s subsidiary in Congo, AAOG Congo continues to operate the Tilapia oilfield on an interim basis following the implementation of a “Plan for the Continuation of Activities” agreed with the national oil authorities.

Zenith said Monday it had submitted “a comprehensive commercial and technical offer (the “Offer”) to the Ministry of Hydrocarbons of the Republic of the Congo for the award of a new 25-year license for the Tilapia oilfield to be named Tilapia II.”

The license is situated 1.8km offshore and entered into production in 2008. Having been drilled from onshore, there is no requirement for offshore

The company expects to receive a preliminary indication regarding the possible acceptance of the offer within the next 30 days.

Chevron to Buy Noble Energy for $5 Billion

Buhari Approves African New Boards For NLNG, BGT Development

U.S. oil major Chevron has agreed to buy Noble Energy, in an all-stock transaction valued at $5 billion, or $10.38 per share. Based on Chevron’s closing price on July 17, 2020 and under the terms of the agreement, Noble Energy shareholders will receive 0.1191 shares of Chevron for each Noble Energy share. The total enterprise value, including debt, of the transaction, is $13 billion.

Maersk Drilling Upgrades Maersk Valiant Drillship Danish offshore drilling company Maersk Drilling has recently upgraded its 2014-built Maersk Valiant ultra-deepwater drillship. While the Maersk Valiant was recently stacked offshore Port Fourchon the Managed Pressure Drilling (MPD) system was upgraded by integrating the new BTR rotating control device (RCD) by Weatherford. The upgrade introduced a new control system for subsea components by SafeKick together with a number of further enhancements to surface piping arrangements to ensure the system can be used for influx management and riser gas handling with MPD chokes, Maersk Drilling said.

resident Muhammadu Buhari has approved the newly reconstituted board of Nigeria Liquified Natural Gas (NLNG) and Bonny Gas Transport Limited ( BGT). The Minister of State for Petroleum Resources, Chief Timipre Sylva, made the disclosure in a statement in Abuja. He said that the current board members had been in office since 2005, hence the need for new people to bring new ideas in the system. According to him, the new board members for the NLNG include Dr Edmund Daukoru as Chairman, Mr Henry lkem-Obih as a Member and Dr Rabiu Sulaiman as a Member. Other Members include the Group Managing Director of the Nigerian National Corporation (NNPC), Malam Mele Kyari and the Permanent Secretary, Ministry of Petroleum Resources, Mr Bitrus Nabasu. He also said that Daukoru was also approved as the President of the Board of BST while Doyin Akinyanju and Abdul Abba are members.

Bank set to Join Landmark $20 Billion Mozambique LNG Financing

he African Development Bank has concluded its bid to co-finance the construction of Mozambique’s integrated Liquefied Natural Gas (LNG) plant by signing a senior loan of $400 million for the transformational project. The Mozambique LNG Area 1 Project, estimated to cost over $20 billion, is ranked Africa’s single largest foreign direct investment to date. It comprises a global team of energy developers and operators, led by Total alongside Mitsui, Oil India, ONGC Videsh Limited, Bharat Petroleum, PTT Exploration, as well as Mozambique’s national oil and gas company, ENH. With the signing on 15 July, the Bank joins a global syndicate of commercial banks, development finance institutions and export credit agencies to provide the requisite financing for the project. Financial close is expected later in 2020.

Angola Signs New Service Deal with ExxonMobil on Block 30 The Covid-19 pandemic has not stopped Angola’s hydrocarbons regulatory body, the ANPG, from signing a risk service contract (RSC) with American super major ExxonMobil for the offshore exploration of block 30 in Namibe Basin. Under the terms of the agreement, approved by decree by President João Lourenço on 13 July, ExxonMobil will cover all exploration costs while benefitting from certain tax advantages. Unlike a production sharing agreement (PSA), the RSC is not subject to a tender and was negotiated directly with Exxon. Andre Kostelnik, ExxonMobil’s country manager for Angola, had signed a first memorandum of understanding in 2018 with the then CEO of Sonangol, Carlos Saturnino. This also covered blocks 44 and 45, which lie adjacent to block 30, and for which ExxonMobil is soon expected to sign contracts. The US major’s subsidiary Esso is the operator of Angolan block 15, of which it owns 40%, and holds 20% and 17% respectively of blocks 17 and 32 on Total’s Kaombo Project.

OFFSHORE VOL.10.6

London-listed Zenith Energy has applied for an extension of the Tilapia license term in the Republic of the Congo, which expired on July 18, 2020.

POWER

South Africa Homeowners and Shack Dwellers Clash Over Illegal Electricity Connections

Boost for Kariba Hydro Power Station

• Clashes in South Africa over illegal power connections • Kariba Dam

Formal homeowners and shack dwellers clash over illegal electricity connections in NU29, Motherwell Homeowners and residents of South Africa’s Endlovini informal settlement in NU29, Motherwell, are at loggerheads over illegal electricity connections. Tension between the groups erupted in a protest on Tuesday, with burning tyres and branches to block the R334 also known as Uitenhage Road. Shack dwellers are demanding that the Nelson Mandela Bay Municipality provide them with electricity. The neighbouring homeowners say they often experience electricity outages caused by illegal connections.

OFFSHORE VOL.10.6

A protester, who did not want her name published, said her electricity connection was abruptly cut off by homeowners on Sunday. Her shack was getting electricity illegally from a roadside electricity pole.

“They never gave us notice. They just cut our electric cables accusing us of causing electricity outages in the area. Now I am

desperate. I will have to throw away my meat and other food,” she said. Another protester who only identified himself as Mongezi said, “As long as the municipality does not provide us with electricity, the illegal connections will continue. There is going to be bad fighting between informal settlement dwellers and homeowners because we can’t live in darkness.” Groundup spoke to residents who live near Endlovini. They said their appliances and laptops had been damaged because of problems with the electricity supply. “Shack dwellers leave webs of uncovered cables running on the ground. That is very dangerous. We cannot wait for a person to be electrocuted for us to act. They should fight their battles with the municipality without including us,” said one of the residents.. Police spokesperson Captain Andre Beetge said residents of the informal settlement briefly closed the road with burning tyres but no major incidents occurred.

THE Zambezi River Authority (ZRA) has increased water allocation for electricity generation in Zimbabwe and Zambia following improved water inflows into Kariba Dam. This means Kariba Hydro Power Station is set to increase output, which is good news to industry as power supply is one of the key enablers. Adequate power supply might result in reduced power imports thereby saving the country the much needed foreign currency. In a statement, ZRA chief executive officer Engineer Munyaradzi Munodawafa said water levels at Kariba Hydro Power Station was increased by four billion cubic meters (4BCM) after a review of the hydrological outlook. He said the additional water allocation would be shared equally between the Zimbabwe Power Company (ZPC) and Zambia Electricity Supply Corporation (Zesco), adding that the authority will continue to monitor the hydrological outlook at Kariba. “Following a review of hydrological outlook at Kariba undertaken at the end of the second quarter of 2020, the

authority has since increased the water allocation for power generation operations at Kariba by 4BCM,” said Eng Munodawafa. The water levels at Kariba Dam, which reached a peak of 481,30 metres on the 30th of June have, however, started receding with the recession expected to continue until the next rainfall season. “This is an upward review of the combined water allocation for the year from 23BCM to 27 BCM. The Authority will continue to monitor the hydrological outlook for the Kariba catchment and water levels at the Kariba Dam,” he said. The rehabilitation works at Kariba Hydropower Plant were completed in 2018 resulting in the plant’s installed capacity improving to 1 050MW from 750MW. In line with this, ZRA allocated about 11BCM to Kariba Power Station, which is consistent with a generation capacity of 275MW/h. On a positive development, the Lake Kariba level has continued to rise steadily during the quarter, closing at 478m (19,20 percent of usable storage).

Nigerian Senate to Pass New Electricity Law in August The Chairman, Nigerian Senate Committee on Power, Gabriel Suswam, has assured Nigerians that the problems associated with the quality of electricity supply in the country would soon be addressed with a legal framework. He said the Senate was putting together, a comprehensive Electricity

Act in collaboration with the Nigerian Electricity Regulatory Commission to tackle the challenges facing the consumers, the suppliers and the regulators. Suswam stated this when he led the Senate Committee on Power on oversight function to the NERC headquarters and other power installations in the Federal Capital Territory.

He said, “The legal framework that we have in place which regulates the power sector, was set up in 2004, just to enable the government to privatize the sector. “Now we’ve gone beyond privatisation, and there has to be an electricity act for the country. “The Act, which should be

ready in August, will set a legal framework that would touch on the issue of energy theft, and the sanctions against those who bypass meters. ” It will also give potential investors to come and invest in Nigeria knowing that the legal framework for the country’s power sector protects them.”

COUNTRY FOCUS- EQUATORIAL GUINEA

Intrigues as Oil -rich Equatorial Guinea’s First Lady Accelerates Succession Plan

s the strength of family patriarch Teodoro Obiang Nguema wanes, his wife Constancia is setting up the political mechanisms which will enable their son Teodorin to take his place as president. The powerful first lady Constancia Mangue Nsue Obiang is working to bring new people into the government and the ruling Partido Democrático de Guinea Ecuatorial (PDGE). Their main job will be to help her son, Teodorin Obiang Nguema, who is currently vice president, on his path towards the presidency. His father, Teodoro Obiang Nguema, who is 78 years old and has been president for 41 years, is increasingly showing signs of fatigue.

becoming president, arguing that he would destroy the regime’s respectability. One such is the president’s own brother, former defence minister Armengol Ondo Nguema. Security issues According to our sources, the vice president is currently in the process of negotiating major defence contracts with the Chinese state. Israel is also trying to take advantage of the situation to win new security contracts from the vice president. •

Pastor Micha Ondo Bilé, who is currently small companies minister. Ondo Bilé, who is well liked in Western embassies, could moreover become transition president should the head of state find himself unable to exercise his duties. In this way, he could prepare the way for Teodorin to take over the reins. Although Obiang Lima has, until recently, been a favourite with the American oil companies - ExxonMobil, Marathon Oil, Noble Energy - Teodorin has been working hard in recent weeks to forge closer relations

son’s control. She has held talks to this end with the Equatorial Guinean opposition in exile in Spain, offering it assurances should certain of its members wish return to Equatorial Guinea and even offering them certain ministerial posts.

with US ambassador Susan N. Stevenson, via his position as organiser of the national response to the Covid-19 health crisis. He hopes in this way to gain greater respectability in the eyes of the US.

use of public funds by foreign dignitaries to buy property and cars in France.

Her aim is to prevent them taking up too hostile a stance towards her son, who has been given suspended prison sentences of several years, notably in France, where he has been involved in the so-called ill-gotten gains affair involving the alleged

Influential First Lady Constancia Mangue Nsue Obiang

In recent months, with a view to increasing his influence over the party, Osa Osa had been relying on the first vice president of the Chamber of Deputies, Santiago Nsobeya Efuman Nchama, but he died on 8 July. Nchama had served as guarantor of the transfer of the institutional powers which Teodorin would need in his bid for the presidency. He also worked behind the scenes to bring the party’s old guard into line behind the vice president. The battle within the PDGE will not be an easy one, however. Some party notables are doing all they can to prevent Teodorin

Teodorin sees these negotiations as a means of assuring his security in the event that he becomes president. He knows he has many critics, who include members of his own family. He has come under attack from his step-brother, oil minister Gabriel Obiang Lima, whom senior regime figures blame for a fall in the country’s oil production. Should his step-brother move on to higher responsibilities, Obiang Lima could lose his portfolio to

Opposition in exile The first lady has already made all her plans for the eventuality that the succession comes sooner than expected or that a new government is set up under her

Equatorial Guinea, a tiny west African nation that relies on oil and gas for 90% of state revenue, had already been grappling with falling output and the desire of certain oil majors, such as ExxonMobil, to exit the country. The country produces about 120,000 barrels per day of crude.

OFFSHORE VOL.10.6

Constancia Mangue can count on the support of PDGE boss Jeronimo Osa Osa Ecoro in carrying out her task. He is pushing for the formation of a new government over the summer which will be composed solely of people close to Teodorin. This government will have the task of bringing him to power, although his existing duties are limited solely to defence matters.

SPOTLIGHT

Ghana To Revoke Licenses of “Non-Performing” Oil Blocks Ghana’s Minister of Energy, Hon. John Peter Amewu, is expected to announce the cancellation of licenses granted to some firms to explore for oil and gas offshore Ghana. The licensees have failed deliver the minimum work obligations as stated in their petroleum agreements. “The Petroleum Commission has done some serious work compiling a list of licenses to be relinquished to Ghana. The Minister has the list and will take the final decision very soon,” a source told our reporter. Offshore Africa gathered that some licenses penciled down for revocation may be expunged due to recent commitments made to deliver on long delayed work obligations. Our sources did not provide definitive figures regarding blocks targeted for revocation, but top Ghanaian oil officials have not hidden their disquiet over the current state of affairs. “I have charged the Ministry of Energy to review critically existing operations in the industry, with a view to determining oil fields that are sub-optimal,” President Akufo Addo had warned in 2018. “For Petroleum Agreements that are dormant, the Ministry will encourage the operators to consider inviting stronger companies to join them or risk the termination of these Petroleum Agreements,

Ghana currently has concluded 19 Petroleum Agreements for offshore oil blocks. According to Energy Minister John Peter Amewu, Petroleum Agreements provided for a total minimum financial commitment for the period 2013 and 2016 projected at $860 million. The amount was to have been spent on seismic data acquisition, processing and interpretation, technical studies, and more importantly, drilling 14 exploration wells during the period. Ghana’s Petroleum (Exploration and Production Act, 2016 Act 919, says in section 21(1) that “A petroleum agreement shall contain as a term of the agreement, a provision that specifies that the exploration period is subject to subsection (5) not more than seven years from the effective date of the agreement.” Section 21 (2) “The exploration period shall consist of working periods, comprising an initial exploration period and up to three extension periods as provided for in the petroleum agreement, within the total exploration period.” Under section 23 (3), the minister is empowered to cancel the license, noting “The Minister may in the circumstances specified under subsection

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Axim 4-3X Oil & gas shows AGIP (1982) TD’d @ 4016m in Aptian

Komenda 12-1 Oil & Gas shows Phillips Petroleum (1975) HC Shows in Sekondi Jurassic & Takoradi Devonian TD’d in Silurian Elmina Sandstone Fm. @ 2974m

Ankobra 1 Dry (shows) Hess (2008) TD’d @ 3965m in Aptian

Lynx-1 Oil, gas & condensate (non-commercial) Lukoil (2014) Structural Anticline with Albian/Cenomanian deep marine sandstones reservoir and Albian/Cenomanian shale source

Dzata Gas, condensate, oil (non-commercial) Vanco (2010) Structural anticline with Albian/Cenomanian deep marine sandstones reservoir and Albian/Cenomanian shale source

hana has suspended indefinitely plans to launch its second bidding round for offshore blocks on the back of current realities and challenges. The country has struggled to conclude its first oil and gas bidding session, which started in 2018 and initially due for completion at the end of 2019, due to a stalemate in negotiations for the final award of blocks. Ghana, last year, announced the preliminary award of two

• Direct Negotiation: • Block 5 • Block 6 • GNPC Allocation • Block 1

(2) terminate the petroleum agreement.” Most of the dormant offshore blocks were awarded in 2014 to companies such as Erin/Camac Energy, UB, Sahara, Medea, and Britannia U. One block that may have already reverted back to Ghana is the Expanded Shallow Water Tano (ESWT) block, estimated to contain at least 500 million barrels of oil and 282 billion cubic feet (bcf) of natural gas, awarded to Erin Energy (formerly Camac Energy) in 2014. The Houston-based company voluntarily declared bankruptcy in 2018. An independent assessment of the block by Erin in 2015 said the ESWT Block, with three legacy oilfields in shallow water contained 500 million barrels in place and 280 bcf. The ESWT block covers an area of 1,508 km2 is bounded on the north by the Ghana coastline, on the east by the maritime border with Ivory Coast, on the south by the Deepwater Tano Block, which

hosts the TEN field, and on the east by the West Cape Three Points block. The block hosts a number of discoveries and fields, which include the North Tano oil and gas field (1980), the CTS-1X gas discovery (1989) and West Tano heavy oil discovery (1999), by GNPC and its partners; and the South Tano fields. The ESWT assessment considered results of 14 wells drilled by prior operators, many of which were flow-tested with oil and gas to surface test rates ranged from 600 b/d to 2,047 b/d of 15-30 gravity oil. Erin said tests established a maximum gas flow rate of about 13 MMCFD. The independent assessment also involved evaluation of 3D seismic data, geological and well data from the discovered fields to determine the commerciality of the three discoveries. Erin Energy held 60 percent interest in the field: Base Energy 15 percent; and GNPC held the remaining 25 percent.

SECOND BID ROUND SUSPENDED INDEFINITELY

Cheetah-1 Lukoil (2011) - Dry Thick sequence of high-quality Turonian Sandstone

Tweneboa, Enyenra & Ntomme Gas, condensate & oil Tullow (2009/10) Reservoir: Turonian deep marine sandstone Source: Albian/Cenomanian shale Trap: Stratigraphic pinch-outs

Pecan, Pecan North & Almond Hess (2012/13) – Oil Reservoir: Turonian deep marine sandstone Source: Albian/Cenomanian shale Trap: Stratigraphic pinch-outs

• 3 blocks for open competitive bidding: • Block 2 • Block 3 • Block 4

should they persist in failing to meet their minimum work obligations.”

Exploration Overview Jubilee Kosmos (2007) - Oil Producing, operated by Tullow Reservoir: Turonian deep marine sandstone Source: Cenomanian shale Trap: Stratigraphic pinch-outs

Blocks on Offer

offshore blocks to oil major Eni and Lagos-based First E&P. But

very little progress has emerged in talks leading to the signing of agreements for the blocks.

“The process has been bogged down and there is very little progress,” noted a senior official with knowledge of the transaction. Apparently, both Eni and First E&P are pushing for “better” terms following unprecedented concessions granted to Norwegian firm Aker Energy in a recently revised Petroleum Agreement. “I believe Eni and First E&P will take a cue from what transpired with Aker Energy. They will want the same treatment from the Ghana Government. You can’t blame them, can you?” an

Accra-based oil analyst clarified the impasse.

The delay in awarding the two blocks have stalled plans to offer 15 offshore blocks in the eastern Keta basin for the next competitive bidding process this year. “The first bidding round was a huge learning curve for Ghana. Before the country can go into any future bid rounds, we want to identify the steps that will be needed to get a better outcome,” noted a member of the Bid Committee. Ghana’s Keta Basin is attracting great interest from international oil and gas companies, including BP, Kosmos Energy, Tullow Oil, Equinor and Shell.

FEATURE

• Powered by a blend of up to 10% hydrogen, the NovaLT12 turbine was designed and manufactured by Baker Hughes in Italy and will be installed at Snam’s gas compressor station in Istrana, Italy. • The project represents a new milestone for Italian infrastructure as it continues to adapt to transport hydrogen and reduce CO2 emissions: today 70% of Snam’s pipelines are already built with “Hydrogen ready” pipes. • The initiative follows the European Union’s Hydrogen Strategy launched on July 8, which envisages the installation of at least 40 GW of renewable hydrogen by 2030 in support of Europe achieving climate neutrality by 2050. Baker Hughes and Snam at the end of July announced they have successfully completed testing of the world’s first “hybrid” hydrogen turbine designed for a gas network. The test paves the way to implement adoption of hydrogen blended with natural gas in Snam’s current transmission network infrastructure. The test took place at Baker Hughes’ facility in Florence, Italy with a Baker Hughes’ NovaLT12 gas turbine. The test marks the first time that a gas infrastructure operator such as Snam has tested this type of turbine for its

existing assets. The turbine will be installed by 2021 at Snam’s compressor station of Istrana, in the province of Treviso, Italy. Once installed, the NovaLT12 will not only help to compress and move hydrogen fuel blends through Snam’s transmission network of pipelines, but the turbine will simultaneously use the same fuel to power itself. Snam has the most extensive transmission network among European peers (over 41,000 km globally) and the largest natural gas storage capacity (ca. 20 billion cubic meters globally). Today, 70% of Snam’s pipelines are already built with hydrogenready pipes to help contribute to the reduction of CO2 emissions in Italy. Today’s test further validates the viability of Snam’s infrastructure, including the NovaLT12, to support the transition to hydrogen. By blending 10% hydrogen into the total annual gas capacity transported by Snam, it is estimated seven billion cubic meters of hydrogen could be introduced into the network each year. This amount is the equivalent to the annual gas consumption of three million families and represents a reduction of five million tons of CO2 emissions. Snam is among the first companies in the world to have tested the introduction of hydrogen into a high-pressure gas transportation network, first at 5% and subsequently at 10%.

The company is also committed to supporting the growth of the Italian supply chain through the development of technologies to facilitate the use of hydrogen in multiple sectors, from industry to transportation. Designed by Baker Hughes, the NovaLT is the industry’s first family of high-performance gas turbines inherently designed for hydrogen as well as other lower-carbon fuels. The turbines are capable of burning methane gas and hydrogen blends from as little as 5% to as much as 100% hydrogen. Developed using state of the art high performance computational methods and manufacturing technologies such as additive, the NovaLT family of turbines is suitable for a variety of applications, including industrial cogeneration, pipeline, and offshore. Compared to other technologies in its class, the NovaLT provides lower consumption, wider operational flexibility, lower maintenance intervals, and emissions as low as single digit ppm. The successful test follows a few days after the launch of the European Commission’s Hydrogen Strategy, which establishes intermediate goals for the production of renewable hydrogen in Europe including the production of at least 40 GW of hydrogen from renewables by 2030 and by 2050 it deployment at a large scale of hydrogen across all hard-to-decarbonize sectors.

Snam’s CEO Marco Alverà said: “With this new testing with Baker Hughes, we are taking a further step forward in the path of adapting our network to the transportation of hydrogen. The infrastructure, as also highlighted in the Hydrogen Strategy recently presented by the European Commission, will be an enabling element in the development of clean hydrogen. Hydrogen will be a pillar of the fight against climate change alongside renewable electricity and will potentially reach 2025% of the global energy mix by 2050. Thanks to its technologies, energy system and geographic position Italy will play a leading role in this environmental challenge, while also generating opportunities for local development and employment”. “The completion of this test represents an important step in defining the energy of the future,” said Lorenzo Simonelli, Chairman & CEO at Baker Hughes. “The energy transition will increasingly need technology to be a critical enabler for success. Building on our strong foundation of industrial expertise, Baker Hughes is proud to work closely with our partners including Snam to offer innovative technologies capable of burning up to 100% hydrogen with low to zero emissions, helping to lead the energy transition together”.

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Snam and Baker Hughes Test World’s First Hydrogen Blend Turbine for Gas Networks

OILIGARCHY

THE GREAT, THE GOOD, THE BAD, THE UGLY By Gilbert Da Costa

midst the raging Covid- 19 pandemic, I took a huge risk presenting myself for the traditional in-person voter registration at a centre about 100 metres from my Accra home. My children were horrified when they saw me with a newly minted voter’s card. At least two of them were eligible, but not interested. I couldn’t really blame them. The centre where I registered did not observe Covid-19 protocols, as the electoral body had vigorously assured. My temperature wasn’t taken. I saw one of the officials with the temperature gun stuck in his back pocket as I was leaving! There was no water and bucket to wash my hands. I had my sanitizer, tissue paper, a face mask and was super alert. Having my fingerprints taken was unnerving.

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But why was there a need for a new voter registration in Ghana? I thought some money could have been saved in an era of austerity? I knew that the health protocols wouldn’t be followed as the authorities elaborately highlighted, and thus may contribute to new Covid-19 infections.

And now that the virus had been with us for months now and not in a hurry to leave, I am a bit concerned about the impact

on the national economy. The economy is down and millions of jobs have been lost around the world, with huge implications for revenues. The budget deficit figures are looking very alarming already. Ghana is expected to exceed a budget deficit of more than 10 percent, and economic growth has plummeted to less than one percent. The natural instinct in this scenario is to cut back on public spending. When time changes, you change your position, is a popular Ghanaian saying. And with elections due later this year, can we adopt the pragmatic steps needed to stabilize and grow the economy? I guess the fact that this is election year could make cuts in government spending a bit tricky. I encountered a Sierra Leonean lady called Sybil on the internet few days ago. She described herself as Chair, Board of Directors, Sierra Leone Local

Content Agency. I found the existence of a local content body in Sierra Leone, which has no oil and gas profile, very interesting. So, I engaged her in a chat and it turned out that the group has a broader mandate, focusing on critical sectors, such as mining, manufacturing, agriculture, tourism etc. What stops other African countries from implementing local content in key sectors? After many decades of mining, Ghana has no business with a mining sector dominated by foreign companies. Indigenous Ghanaian companies ought to be in the driving seat of mining. Every public procurement must have a significant local content component. It is simply ridiculous and indeed criminal flittering away hard-earned revenues to import things that could be manufactured locally. The fact that the award of new oil licenses to Eni and First E&P has been unduly delayed by inconclusive negotiations is quite disheartening. I actually anticipated the impasse when I saw the goodies that authorities piled into Aker Energy’s basket in their revised Petroleum Agreement last year. Henceforth, every company bidding for an oil block in Ghana will point

to the Aker Energy petroleum agreement in pushing for a similar package or something even more generous. A total of 72 potential blocks have been identified offshore Ghana, so we expect Ghanaian oil officials to get busy and set the processes in motion. With energy transition looming large, and the volatility of the oil market, Ghana should get its acts together quickly. When is Aker Energy resuming their development project at the deepwater Pecan field in Ghana? I have been asked so often that I’ve lost count. Despite all the jumbo perks and sweeteners, the Pecan project could still not fly. The disappointment within officialdom is palpable. No single major upstream project took off during the three-andhalf year rule of the National Patriotic Party (NPP). But can the Administration be blamed for the current paralysis in the oil and gas sector? What is the NPP scorecard for the petroleum industry? Share your thoughts and viewpoints with me at offshoreafricamagazine@gmail. com.

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